Ohio teacher’s retirement

Angela Pino

Beginning July 1, 2013, the State Teacher Retirement System of Ohio will begin phasing in changes.

Bill 342 was passed in the Ohio Senate in May and then was passed into law by the House Sept. 12.

Shara Bailey, STRS representative, said the changes were needed because pension funding has been negatively affected by the recession.

“Without these changes, STRS would eventually be unable to pay benefits,” Bailey said.

Under the new law, age and service requirements will increase starting Aug. 1, 2015. These changes will be phased in so that by August 2026, the minimum age will be 60 and the years of service will be 35 in order to retire with full benefits.

Other changes include member contribution increasing from 10 percent to 14 percent so that it matches that of the contribution from the employer. The final average salary will be based on the five high years of pay as opposed to the former three years of highest pay. This will reduce salary by approximately 3 percent.

“There is an incentive to retire because of loss of benefits,” said Charles Harker, associate professor in the College of Architecture and Environmental Design.

Harker also said that since he is more than 65 years old, the changes will have minimal impact on him. He also said that it is not a matter of liking or not liking the changes but that without them, he would have worked longer.

Another big change the law will bring is that the cost to buy retirement credit for those who worked out of state or in private schools will increase greatly. Also, survivor benefits will increase from one-and-a-half years to five years.

While the law goes into effect in early January 2013, changes will not be seen until July.

“When you love your job, the prospect of retirement is always a little difficult,” Harker said.

Contact Angela Pino at [email protected].