April 23, 2012 (PLANSPONSOR.com) – The State Teachers Retirement System (STRS) of Ohio voted to amend its plan to strengthen the financial condition of the pension fund.
The proposed amendments are projected to save about $13.3 billion in accrued liabilities and maintain a 1% employer contribution to STRS Ohio’s health care fund, and do not include any increase in employer contributions.
All the changes to the plan will require legislative action by the Ohio General Assembly and the governor to be implemented. The components of the plan include:
- Increase in member contributions effective July, 1, 2013. Member contributions would increase by 4% phased in 1% per year beginning July 1, 2013, through July 1, 2016.
- Change in eligibility for retirement, effective August 1, 2015. Service credit requirements for retirement with an unreduced benefit would increase to 35 years of service by August 1, 2023, and a minimum age 60 requirement would be added beginning August 1, 2026. Members may still also retire at age 65 with a minimum of five years of service credit.
- The service credit requirement for an actuarially reduced benefit would be phased in beginning August 1, 2015, gradually increasing to 30 years of service by August 1, 2023. Members may also still retire at a minimum age 60 with five years of service, but the benefit would be actuarially reduced beginning August 1, 2015.
- Increase in final average salary (FAS) years effective August 1, 2015. FAS calculation would be based on the five highest years of earnings.