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Showing posts from April, 2015

April Board News

The Retirement Board voted to increase the mitigating rate by 1%, which will impacts those in the Defined Contribution (DC), Combined Plan, and alternative retirement plan participants (ARP). The mitigating rate subtracts from the teacher's total contributions -- legislated at 14% employee and 14% employer once recent increases are phased in by July 2016. It then allocates the subtracted portion to the traditional defined benefit plan, which said teacher does not participate in nor derives benefit from, in order to "offset the negative financial impact of participation in a DC plan" (per Ohio STRS). A few things are interesting about this to me: It's good to pause and realize a 14% employer contribution for STRS is very rich and unheard of in private companies. The mitigating rate for Ohio STRS will be a whopping 5.5% yet Ohio PERS is only increasing to 2%. Compound 3.5% of salary over a working lifetime and that equates to a substantial dollar difference. Best Rega…