Leaving STRS Ohio: withdraw or keep your account?

What a withdrawal pays

• Under 3.00 years: your contributions plus 2% interest, compounded yearly
• 3.00 to 4.99 years: contributions plus 3% interest
• 5.00 or more years: contributions plus 3% interest, plus 50% of that total

When you leave Ohio public service you can withdraw your account instead of taking a benefit. A withdrawal cancels your membership, service credit, benefit eligibility and access to health care. Interest rates are set by the board and can change; interest starts in the fiscal year after each deposit. If you're married and eligible to retire, your spouse must consent.

Paid to you: taxed that year, 20% federal withholding, and a 10% penalty may apply before 59 1/2. Rolled over: not taxed until you take it out. Survivor Benefits, pp. 18-21 More on this under taxes. If you come back to Ohio teaching, you may be able to restore withdrawn credit; see buying service credit.

Keeping your account

If you leave Ohio public service with at least 5.00 years of qualifying credit and don't withdraw your account, you can start a benefit when you later meet an age requirement. Plan Summary, pp. 14-15; Eligibility Requirements web page The STRS Ohio calculator estimates that later pension: enter your service so far and the date you'd start it. The retiring early guide has the ages.

Monthly payments keep a lifetime benefit, survivor benefits, access to health care, COLAs and death benefits; a withdrawal gives you control of the money but ends all of those. Plans of Payment, pp. 30-31, Monthly payments vs. account withdrawal

If you leave because of illness

STRS Ohio has disability benefits. For example, the disability allowance for 22 years and a $50,000 final average salary is 48.4%: $24,200 a year. Plan Summary, pp. 14-15, Disability Allowance Example

Disability allowance: 2.2% of FAS per year of Ohio service, at least 45% and at most 60% of FAS. Disability retirement (only some members from before July 30, 1992): 2% per year of actual plus projected service to age 60, at least 30% and at most 75%. Members on June 30, 2013 need 5.00 years; new members need 10.00 years. Plan Summary, pp. 10-15; Eligibility Requirements web page, Disability benefits

What the brochures say

• If you leave Ohio public service you can withdraw your account: contributions plus 2% interest with under 3 years, 3% with 3 to 5 years, and with 5 or more years 3% plus 50% of that total.Survivor Benefits, pp. 18-19; Plan Options, p. 12
• A withdrawal cancels your membership, service credit, benefit eligibility and access to health care.Plans of Payment, pp. 28-29
• With 5 or more years you can instead leave your account with STRS Ohio and start a benefit later, when you meet an age requirement (60 reduced, 65 unreduced).Plan Summary, pp. 14-15; Eligibility Requirements web page
• The disability allowance is 2.2% of final average salary per year of service, at least 45% and at most 60%. Members since July 1, 2013 need 10 years of qualifying service; earlier members 5 years.Plan Summary, pp. 10-15

Questions