Retirement contribution rate changes
As a reminder contribution rate increases for members of the State Teachers Retirement System (STRS) will continue to increase by 1% per year through July 1, 2016. Effective July 1, 2015 the employee contribution rate will increase from 12% to 13%.
Mitigating contribution rate change
The mitigating rate was established in recognition of the impact of allowing a portion of the eligible population to elect alternative retirement plans (ARP). It is designed to offset the negative financial impact resulting from the exclusion of this population and was a tradeoff for the ability to opt out of the state retirement plans. This rate is assessed from the employer contribution for each employee participating in an alternative retirement plan.
STRS Eligible Participants
State Teachers Retirement Board Amends Prior Action on Mitigating RateAs previously communicated, a recent legislative initiative sought to modify STRS Ohio’s increase in the mitigating rate for ARP participants. To provide an opportunity for STRS Ohio to work with the legislature on a long-term agreement on the mitigating rate, the Retirement Board voted at its June meeting to amend its April 2015 action regarding changes to the defined contribution program that pertained to increasing the mitigating rate. The board action means the mitigating rate for DC Plan and ARP participants will remain for now at 4.5%.
OPERS Eligible Participants
The current rate of 0.77 percent has remained unchanged since 2008. The Ohio Public Employees Retirement System (OPERS) periodically reviews the rate and projects the rate needed. The most current review indicated the need for an increase from 0.77 percent to 2 percent over a 3-year period beginning January 2016. The phase-in will be as follows:
- January 2016 1.00%
- January 2017 1.50%
- January 2018 2.00%
The new mitigating rates will apply to all ARP participants, not just those newly enrolled.
For more detailed information on these changes contact:
OPERS at 1-800-222-PERS (7377) or https://www.opers.org
STRS at 1-888-227-7877 or https://www.strsoh.org
ARP participants contact your individual alternative retirement plan vendor