STRS Offers New Options
Date: July 16, 2001
To Eligible Faculty
By: Marianne Kunnen-Jones
Phone: (513) 556-1826
Archive: Campus News
Eligible faculty members at UC now have choices to make concerning their state retirement plans. Beginning July 1, the State Teachers Retirement System (STRS) is now offering two new retirement options.
In addition to the traditional defined benefit plan, which provides retirement benefits based on a rigid formula, STRS is now offering eligible faculty members two additional options:
The STRS Ohio Defined Contribution Plan, which allows eligible faculty members to manage the type of investment vehicle in which they wish to place their payroll-deducted contributions.
The STRS Ohio Combined Plan, which allows eligible faculty to split their contributions between a traditional Defined Benefit Plan and the new Defined Contribution Plan.
The new options affect only new faculty hired on or after July 1, 2001, or those with five years or less of service credit with STRS. According to UC Benefits Director Betty Young, STRS will determine who is eligible and send them a packet of materials on the new plans.
With more options concerning their retirement futures facing them, what sorts of questions should faculty be asking themselves before making a decision? Young advises: "First, read through all of the informational materials STRS is sending. These materials are very important. Then, look at your professional position. Do you have a need for your plan to be flexible and portable? The Defined Contribution Plan may offer more portability for those who desire it."
She adds: "You also need to consider how much risk you are willing to assume. Under the Defined Benefit Plan, there is little risk. Retirement benefits are based on a calculation that looks at components such as age, length of service and the final average salary. In a Defined Contribution Plan, your retirement benefits will depend on the investment choices you make and how your funds are allocated. You choose where to invest your contributions to the plan."
Eligible faculty have until Dec. 27 to select which option they desire, Young said. Those who don't respond by Dec. 27 will remain in the traditional Defined Benefit Plan.
The Public Employees Retirement System (PERS), which is the retirement plan for many other UC employees, is slated to introduce similar options sometime in 2002, Young said. Eligible employees will be notified when more information on the plan is available.
In the meantime, faculty can find more information about the new STRS options on the web at http://www.strsoh.org. If you click on the University & College Faculty button, there is an online calculator to help you gauge which option might be best for you. All questions should be directed to STRS at 888-227-7877.