The Ohio Public Employees Retirement System (OPERS) offers three types of plans. Which is the best for you will depend on your circumstances and how involved you want to be in controlling how money put toward retirement and possible long-term disability is invested. Considerations to take include your age, whether you are married, whether you have children, your expected expenses after you turn 65, and if you have one or more health conditions that could force you to stop working before you reach retirement age.
The same caveats apply to participants in the State Teachers Retirement System (STRS) in Columbus, Ohio, and participants in the School Employees Retirement System. Each option must be weighed carefully. Those and other public sector employee retirement programs offer complicated choices to enrollees.
As disability attorneys based in Columbus, OH, the lawyers with the Jones Law Group welcome opportunities to advise government workers, public safety personnel, and university faculty on their retirement and disability plan options. We cannot offer definitive answers here, but we will outline some basic features of the three OPERS choices.
OPERS Traditional Pension Plan
This is the kind of plan many people think of when they hear “government pension.” A participant’s employer makes all the contributions to the retirement and disability program, and benefits are paid out based on the participant’s years of service and the person’s age at the time he or she left public sector employment.
If you sign up for the Traditional Pension Plan, you do not need to pay attention to the stock market, 401(k)s or any of the quarterly and annual paperwork needed to manage investments. You will also have the option, unique among OPERS plans, to set up an annuity.
A possible downside is that the pension is fixed at what OPERS is required to pay based on the years-of-service-and-age formula.
OPERS Member-Directed Plan
Signing up for the OPERS Member-Directed Plan lets you set up your own retirement fund and control how a portion of your employer’s retirement plan contribution match is invested. You will need to designate a percentage of each paycheck to retirement.
While the Member-Directed Plan gives you the most say in where your money goes and potentially offers the largest returns on investments, it also limits your options for accessing your retirement funds. Unlike the traditional and combined plans, the Member-Directed Plan does not provide long-term disability benefits. It also does not pay a death benefit to the survivor of a plan participant.
OPERS Combined Plan
Columbus, Ohio, OPERS participants who opt for the Combined Plan get to control the investment of the portion of their paycheck they designate for retirement while also having their employers contribute to a traditional pension fund. At retirement, a Combined Plan participant receives fixed payments based on years of service and age at the time of separation. The participants also get to draw from their own retirement account that they managed like a 401(k).
The big caution here is that Combined Plan participants can lose principal when they invest their own funds. On the other hand, OPERS guarantees payment from the traditional pension portion of the plan.