Understanding Minimum Age 60 With 35 Years Of Service Your .

DEFINED BENEFIT PLANSTRS Ohio Defined Benefit PlanReporting of individual accountsSTRS Ohio offers a Defined Benefit Plan, in whichthe amount of a member’s retirement benefit isderived from a defined calculation that considers age,years of service credit and final average salary. Theretirement benefit is funded during employment sofunds accumulate during the time the actual benefitliability is established.Each October, Defined Benefit Plan and CombinedPlan participants receive an Annual Statementof Account as of the preceding June 30. Thisstatement, which you have the option of viewingonline or receiving by mail, provides valuableinformation about the financial protection youhave established for you and your family based onyour contributions. The statement does not includecontributions and service credit established inanother Ohio retirement system.The Defined Benefit Plan is also an “actuarialreserve” system — funds to pay future benefits comefrom employer and member contributions, as wellas from investment income. Unlike many publicpension plans, STRS Ohio does not depend onperiodic or direct state appropriations for financing.Members currently contribute 10% of annual grossearnings to the system. These contributions are heldin trust in the Teachers’ Savings Fund.Employers currently contribute 14% of their totalfaculty payroll to the Employers’ Trust Fund. Atretirement, funds from this account are combinedwith the Teachers’ Savings Fund; the investmentyield from both provides funding for all benefits.Based on actuary recommendations, the StateTeachers Retirement Board determines fundinglevels for the statutorily defined benefits.When a member accepts service retirement or disability benefits, STRS Ohio transfers the individual’saccount, plus additional monies needed to fund thebenefit, to the Annuity and Pension Reserve Fund,from which all such benefits are paid.In lieu of retirement benefits, members may withdraw their account when they terminate employment,receiving a lump-sum amount that includes contributions and interest. Members who withdraw theircontributions give up all rights to retirement benefitsand possible access to health care from STRS Ohio.Prefunding helps to ensure that benefits will be paidwhen due the member. The ratio of assets to accruedbenefits and long-term returns on STRS Ohio investments provide this financial security for the future.4DEFINED BENEFIT PLANwww.strsoh.orgThe statement serves as a history of your earnings,deposits and retirement credit for each academicyear. It reflects your total account balance, accountwithdrawal value and service credit. All informationreported is subject to audit before your retirement.Be sure to review your account statement each yearfor accuracy and contact STRS Ohio immediately ifany of the information appears to be inaccurate.In addition, the statement includes estimates ofsurvivor and disability benefits, assuming you meetor will meet the eligibility requirements for thesebenefits. A listing of any service credit that you areeligible to buy and have certified with STRS Ohiois also included.Designation of beneficiariesIt is important to identify beneficiaries in the caseof the death of the member. The statutory successionof beneficiaries determines who is eligible to receivea withdrawal or monthly benefit when a memberdies, unless the member completes a beneficiarydesignation form to designate beneficiaries by name.The statutory succession of beneficiaries is desirablefor most family circumstances.Under statutory succession, beneficiaries qualify inthe following order:1. Spouse2. Qualified children — includes children who areunder age 18 and unmarried; or under age 22,unmarried and attending school on at least atwo-thirds-of-full-time basis; or physically ormentally incapacitated1-888-227-78775

DEFINED BENEFIT PLAN3. Nonqualified children4. Dependent parent5. Parents (share and share alike)DEFINED BENEFIT PLANSTRS Ohio benefits under the DefinedBenefit PlanA summary of basic benefits under the DefinedBenefit Plan follows.6. EstateThe statutory succession of beneficiaries will applyif the member has not previously designated abeneficiary or if the member:1. Designates statutory succession;2. Is not survived by a named beneficiary; or3. Has not filed a beneficiary designation form afterany one of the following:a. marriage;b. birth or adoption of a child;c. divorce, marriage dissolution or legalseparation;d. withdrawal of account; ore. permanent retirement plan selection if a planchange was made.In place of the statutory succession of beneficiaries,members may designate beneficiaries by name. Insome circumstances, this designation may jeopardizemonthly survivor benefit protection to otherwisedependent survivors and may allow only a withdrawalof your account. (For example, naming a trust fundor estate as your beneficiary may allow for only awithdrawal of your account and prevent a survivingspouse from receiving monthly benefits.) If yoursituation is unusual, please consult STRS Ohioabout beneficiary designations.If a member has also made contributions to either theOhio Public Employees Retirement System (OPERS)or the School Employees Retirement System (SERS),the last beneficiary designation filed with any of thethree retirement systems (STRS Ohio, OPERS orSERS) will apply to all three systems.Survivor benefitsA member’s spouse, children under the age of 22,dependent parents and physically or mentallyincapacitated dependents may qualify for survivorbenefits.STRS Ohio determines eligibility for dependentbased and service-based survivor benefits as follows: The member must have 1.50 years or more ofOhio service credit, with .25 of a year havingbeen earned within 30 months before death; orbeen receiving a disability benefit at the time ofdeath. If the member leaves Ohio public service,survivor benefit protection extends for up to27 months after the last contributing serviceor while the member is receiving a disabilitybenefit, provided the account is not withdrawn.A member who has eligible dependents shouldconsider this benefit before withdrawing theaccount during this period.If you meet the eligibility requirements for morethan one benefit, the amount of the benefit is thegreater of a dependent-based benefit, a servicebased benefit or a retirement-based benefit.Dependent-based benefits are payable as follows:Number ofQualified SurvivorsPercentage ofFinal Average Salary*125%240%350%455%5 or more60%*Final average salary: Average of the member’s three highest yearsof earnings. If contributions were made for fewer than three years,total compensation during such a period is divided by the totalnumber of years of service credit in the member’s account. (If finalaverage salary is less than 4,608, minimum benefits are payableaccording to the number of qualified dependents.)6www.strsoh.org1-888-227-78777

DEFINED BENEFIT PLANDEFINED BENEFIT PLANThe service-based benefit is payable when themember has 20 or more years of service credit.Service-based benefits are payable as follows:Years of ServicePercentage ofFinal Average %29 or more60%The spouse’s share of the above service-basedbenefit is as follows:Number ofQualified SurvivorsSpouse’s Share1100%262.5%350%445.45%5 or more41.67%If there is no surviving spouse and more than onequalified survivor, the benefit is divided equallyamong the qualified survivors.benefits are based on the benefit the member wouldhave received if the member had 30 years of service,actually retired and provided the maximum joint andsurvivor benefit to the qualified survivor.Additional information about survivorbenefitsAn STRS Ohio member receiving disability benefitshas the same survivor benefit coverage as an activeteacher.Survivor benefits to an eligible spouse are payableregardless of income from other sources. Survivorbenefits may be more valuable than any otherfinancial protection for a family.The primary beneficiary may withdraw the deceasedmember’s account in lieu of receiving monthlybenefits if there are no children who are qualifiedsurvivors. If there are no qualified survivors, theprimary beneficiary must withdraw the deceasedmember’s account. The withdrawal amount consistsof the deceased member’s contributions plus interestand 50% matching funds, if certain criteria aremet. Survivors of disability or former disabilitybenefit recipients receive the account balance ofthe member’s contributions; no interest or matchingfunds are payable.For complete information, call toll-free1-888-227-7877 to request the Survivor Benefitsbrochure for members enrolled in the DefinedBenefit Plan, or view this brochure online atwww.strsoh.org.The retirement-based benefit is payable when themember dies after qualifying for service retirement(but before actually retiring with STRS Ohio). Onlyone dependent survivor (a spouse or other namedfinancial dependent) may receive a benefit based ona retirement calculation. These benefits are payablefor the survivor’s lifetime regardless of remarriage.Retirement-based benefits are not payable if there isa qualified child.If the member had at least 29.01 years of servicecredit and had reached retirement age, survivor8www.strsoh.org1-888-227-78779

DEFINED BENEFIT PLANDEFINED BENEFIT PLANDisability benefitsDisability retirement programThe Defined Benefit Plan provides coverage formembers whose disability from regular duty ispresumed to last at least 12 months from the dateSTRS Ohio receives the completed DisabilityBenefit Application. It does not provide disabilitybenefits for periods of less than one year. Disabilityleaves of less than one year are usually covered bysick leave earned through employment or by shortterm disability insurance from private insurancecompanies.To qualify for disability retirement benefits, anSTRS Ohio member must:There are two disability benefit programs in theDefined Benefit Plan — disability retirement anddisability allowance. Teachers who were members of STRS Ohio onor before July 29, 1992, participate in eitherthe disability allowance or disability retirementprogram. Teachers who became members of STRS Ohioafter July 29, 1992, have protection under thedisability allowance program.Your Annual Statement of Account indicates yourdisability program.Any applicant who is denied disability benefitsmay appeal the decision to the Retirement Board asprovided by statute and procedures established bythe board. An individual receiving service retirementbenefits is ineligible to apply for disability benefits.Disability recipients who have been receivingbenefits for at least 14 months must annuallycomplete and submit a Statement of Employmentand Earnings After Receipt of a Disability Benefitprovided by STRS Ohio each March. Have 5.00 or more years of Ohio service credit; Submit a completed application packet toSTRS Ohio within two years of the last dateof earned service. This deadline does notapply if the Retirement Board determines thatthe member’s medical records demonstrateconclusively that, at the time the two-year periodexpired, the member was physically or mentallyincapacitated for regular duty and unable toapply for disability; Not be receiving service retirement benefits; Be younger than age 60 when the disabilityapplication is filed; Stop teaching before reaching age 60; and Have most recently contributed to STRS Ohio(versus OPERS or SERS).A monthly disability retirement benefit is based ona percentage (limited to 75% and no less than 30%)of a member’s final average salary. The percentage isdetermined by multiplying by 2% the member’s totalnumber of years of Ohio service credit and projectedcredit to age 60.Disability Retirement ExampleMember’s age projected to age .Member’s present age .60–35Projected credit.Actual years of Ohio service .25 10Total benefit-based service .Formula level .35x 2%70%*Final average salary . x 40,000Annual disability retirement benefit . 28,000Monthly benefit . 2,166*Maximum 75%, minimum 30%10www.strsoh.org1-888-227-787711

DEFINED BENEFIT PLANDisability allowance programService retirementTo qualify for disability allowance benefits, an STRSOhio member must:STRS Ohio’s primary purpose under the DefinedBenefit Plan is to provide lifetime benefits for theretired member. Retirement eligibility requirementsare shown below. Have 5.00 or more years of Ohio service credit; Submit a completed application packet toSTRS Ohio within two years of the last dateof earned service. This deadline does notapply if the Retirement Board determines thatthe member’s medical records demonstrateconclusively that, at the time the two-year periodexpired, the member was physically or mentallyincapacitated from regular duty and unable toapply for disability; Not be receiving service retirement benefits; and Have most recently contributed to STRS Ohio(versus OPERS or SERS).A monthly disability allowance benefit is based on apercentage (limited to 60% and no less than 45%) ofthe member’s final average salary. The percentage isdetermined by multiplying the member’s total yearsof Ohio service credit by 2.2%.Disability Allowance ExampleActual years of Ohio service .Formula level .22x 2.2%48.4%*Final average salary . x 50,000Annual disability allowance benefit . 24,200Monthly benefit . 2,017*Maximum 60%, minimum 45%Disability allowance payments terminate at age 65if the benefit began before age 60, or if the memberis no longer disabled. Once a disability allowanceterminates, a member has the right to apply forservice retirement, if eligible.12DEFINED BENEFIT PLANwww.strsoh.orgEligibility Requirements for Service RetirementAgeYears of Service CreditAny age305525605If a member retires with less than 30 years of servicecredit and before age 65, benefits are reduced. Thereduction is based on total years of credit and age atretirement.A member who has at least 5.00 years of servicecredit and who terminates Ohio public teachingservice before the qualifying age shown above maylater qualify for a benefit. If member contributionsare not withdrawn, a benefit is payable when themember attains the qualifying age.Your effective retirement date is the first day ofthe month following the latter of your last day ofteaching or other Ohio public service, or attainmentof age and service requirements. Credit which wascertified before retirement may be purchased upto three months following the effective date ofretirement.A variety of payment plans are available at retirement, all providing lifetime benefits for the retiree. Atthe retiree’s death, if the amount disbursed under anypayment plan is less than the retiree’s contributions atretirement (no interest or matching funds included),the difference is paid to the beneficiary or estate.There are two types of benefit calculations for serviceretirement: the salary-related benefit and the moneypurchase benefit. The member is automaticallyeligible for the calculation that provides the greaterbenefit. For most members, the salary-related benefitresults in the higher income because it is based on theaverage of the member’s three highest salary years.1-888-227-787713

DEFINED BENEFIT PLANSalary-related benefitThe salary-related benefit is based on the member’s:DEFINED BENEFIT PLANThe chart below shows how this reduction iscalculated.Percent of Full Formula Age at retirement, Total years of service credit, and Final average salary (FAS). The FAS is theaverage of the member’s three highest years ofOhio public earnings.The benefit is calculated by multiplying the first30 years of contributing service credit* and allnoncontributing service credit (including Ohiovalued purchased credit) by 2.2% of the FAS.The 31st year of contributing service credit ismultiplied by 2.5% of the FAS. An additional onetenth of a percent is added to the calculation forevery year of contributing service over 31 years(2.6% for the 32nd year, 2.7% for the 33rd yearand so on) until 100% of the FAS is reached.For STRS Ohio members with 35 or more years ofcontributing service credit, the benefit is calculatedby multiplying the first 31 years of contributingservice by 2.5% of the FAS. All noncontributingservice is multiplied by 2.2% of the FAS. Contributing service credit over 31 years continues tobe calculated at the escalating formula notedpreviously. A member with 35 years of contributingservice credit will receive 88.5% of the FAS.Attained Ageat Retirement 30 29Years Ohio Credit28272625 or less58 or 5 100% 100% 100% 100% 100% 100%For example, if you retire at age 60 with 25 years ofservice credit, you will receive 46.75% of your FAS.Example: 25 x 2.2% 55%55% x 85% 46.75%A salary-related calculation chart is provided onPages 26–27 to assist with estimating a benefit.If you retire with less than 30 years of servicecredit and before age 65, benefits are reduced. Thereduction is based on your total years of servicecredit and age at retirement.*Contributing service credit includes: Service for which contributions were made to STRS Ohio, OPERSor SERS at the time of employment and service that has beenrestored in one of those systems. Credit purchased for military service; police, fire or highwaypatrol service; Cincinnati Retirement System service purchasedor transferred pursuant to Section 3307.763, R.C.; leaves ofabsence purchased pursuant to Section 3307.77, R.C.; andservice purchased as a result of resignations due to pregnancy. Credit purchased for public teaching in Ohio after July 1978 forwhich contributions were not made at the time of employment.14www.strsoh.org1-888-227-787715

DEFINED BENEFIT PLANDEFINED BENEFIT PLANMoney-purchase benefitCost-of-living adjustment (COLA)This calculation is often more beneficial to an STRSOhio member who has not taught for a number ofyears.A cost-of-living increase of 3% is granted each yearonce a member retires.Under the money-purchase calculation, your lifetime contributions, plus interest, are matched byemployer funds to provide an annuity reserve. Theannuity reserve is divided by an annuity value,which is a factor that considers the payments overyour life expectancy and the interest earned on theremaining reserve.Interest is calculated at 6.5% through June 1982;7.75% from July 1982 through June 30, 1994;6.0% from July 1, 1994, through June 30, 1999;5.0% from July 1, 1999, through June 30, 2012;and 4.0% beginning July 1, 2012. Interest rates aresubject to change.Partial Lump-Sum Option PlanDefined Benefit Plan participants have anotherbenefit payment option to consider at retirement— the Partial Lump-Sum Option Plan (PLOP).With this option, new retirees can take an amountfrom six to 36 times the monthly Single LifeAnnuity benefit in a lump sum at retirement. ThePLOP must be elected in 1,000 increments, unlessthe minimum or maximum amount is selected.Lifetime monthly benefit payments begin with yourretirement date but are reduced to reflect the amounttaken up front in a single payment.The COLA is paid in the first anniversary monthof your retirement benefit, which also establishesthe date for future increases. Future increasesare calculated on the original benefit and are notcompounded over the previous year. The cost-ofliving increase is added to the regular monthlybenefit. An example of how the increase iscalculated follows.Cost-of-Living Adjustment (COLA) ExampleBenefit recipient’s original benefit amount . 2,000First anniversary COLA (3%) . 60New benefit amount . 2,060Second anniversary COLA (3%). 60New benefit amount . 2,120COLAs will be calculated on a different amount forretirees who reselect a new plan of payment afterretirement.Death benefit options and eligibilityAfter retirement, an automatic 1,000 death benefitis payable to your named beneficiary upon yourdeath. This is treated as a nontaxable life insurancepayment, and no federal taxes are withheld whenthe payment is made. This benefit is automaticto members who are enrolled in the STRS OhioDefined Benefit Plan.Service retirement and disability benefit recipientsmay purchase an additional death benefit of 1,000or 2,000. This taxable benefit is optional and isfunded by the benefit recipient through deductionsfrom the regular monthly STRS Ohio pension. Thisadditional death benefit is available when you fileyour Service Retirement Application. If you areunder age 65 when you retire, you will have asecond opportunity to increase your death benefitwithin the three months immediately precedingage 65.16www.strsoh.org1-888-227-787717

DEFINED BENEFIT PLANPurchasing service creditService credit is one of the primary factors i

would increase to a minimum age 60 with 35 years of service by Aug. 1, 2026. The phase-in would begin Aug. 1, 2015. Members may still also retire at age 65 with a minimum of fi ve years of service. The service requirement for an actuarially reduced benefi t would be increased to 30 years of service by Aug. 1, 2023. The phase-in would