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Monday, Sep 22, 2014

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STRS contribution increase begins July 1


The State Teachers Retirement System (STRS) recently announced the member contribution rate will increase 1 percent from 11 percent to 12 percent for work performed on or after July 1. This increase is part of the pension reform legislation that was passed in September 2012 to strengthen Ohio’s statewide retirement systems.

These changes to STRS Ohio’s benefit plan design were previously communicated in 2012 (https://www.strsoh.org/_pdfs/legislation/20-663.pdf) and involve an increase in member contributions of 4 percent, phased in 1 percent per year beginning July 1, 2013 and continues through July 1, 2016. Absent legislative changes, members will contribute 14 percent of their salary to STRS Ohio beginning July 1, 2016. 

Legislation also is pending to freeze the percentage of an alternative retirement plan (ARP) participant’s compensation paid by a public institution of higher education to STRS to mitigate any financial impact of an ARP on STRS at 4.5 percent effective until July 1, 2015. The chart below shows the current, as well as future rates, but notes the mitigating rate freeze is pending legislative approval.

STRS-ARP Retirement Contributions:

Current

STRS Defined Benefit and Combined Plans: 11 percent employee contribution, 14 percent Ohio University contribution.

ARP and STRS Defined Contribution Plan: 11 percent employee contribution, 9.5 percent OHIO contribution.

Mitigating rate: 4.5 percent to STRS.

July 2014

STRS Defined Benefit and Combined Plans: 12 percent employee contribution, 14 percent OHIO contribution.

ARP and STRS Defined contribution Plan: 12 percent employee contribution, 9.5 percent OHIO contribution (pending legislation may freeze the STRS mitigating rate at 4.5 percent through July 1, 2015).

Mitigating rate: 4.5 percent to STRS.

July 2015

STRS Defined Benefit and Combined Plans: 13 percent employee contribution, 14 percent OHIO contribution.

ARP and STRS Defined Contribution Plan: 13 percent employee contribution, 9.5 percent OHIO contribution.

Mitigating rate: 4.5 percent to STRS.

July 2016

STRS Defined Benefit and Combined Plans: 14 percent employee contribution, 14 percent OHIO contribution.

ARP and STRS Defined Contribution Plan: 14 percent employee contribution, 9.5 percent OHIO contribution (pending legislation may freeze the STRS mitigating rate at 4.5 percent through July 1, 2015).

Mitigating rate: 4.5 percent to STRS.

Information in this message was submitted by Human Resource Services.