Proposed Pension Plan Changes The Retirement Board has approved a proposed set of changes to strengthen the financial condition of the retirement system. What changes is STRS Ohio proposing for its pension plan?
• Increase age and service requirements for retirement: • Implement a lower, fixed formula for benefits and eliminate the current escalating formula and the enhanced 35-year benefit; • Base the final average salary calculation on the five highest years of earnings; • Reduce cost-of-living adjustments for current and future retirees, as well as defer the payment of COLAs for 60 months for future retirees; and • Increase contributions from STRS Ohio members. Additional details can be accessed here. The implementation date for each plan component (in chronological order) would be as follows: Member contribution phase-in begins July 1, 2012 COLA July 1, 2012 FAS/benefit formula Aug. 1, 2015 Retirement eligibility phase-in begins Aug. 1, 2015 All of these changes require legislative action by the Ohio General Assembly and the governor, as all the plan components require changes in existing statute. Why is STRS Ohio proposing these changes to its pension plan? The short answer is this: Unles
