STRS Ohio PLOP Partial Lump Sum

What the PLOP Actually Is

The Partial Lump-Sum Option Plan lets Defined Benefit and Combined Plan members take a one-time cash distribution at retirement instead of receiving their full monthly pension. You choose an amount equal to 6 to 36 times your calculated unreduced Single Life Annuity monthly benefit, in $1,000 increments.

That upfront cash comes with a permanent trade-off: your monthly pension is reduced for the rest of your life.

How the Reduction Math Works

STRS Ohio uses age-based actuarial cost factors to calculate how much your monthly check drops for every $1,000 of PLOP you take. The older you are at retirement, the higher the factor — because the system expects to pay you for fewer years.

Here's how it plays out with real numbers:

A DB Plan member retiring at age 57 who takes a $25,000 PLOP faces a factor of $7.03 per $1,000. That's 25 × $7.03 = $175.75 less per month, permanently. Over 25 years of retirement, that $25,000 upfront costs you roughly $52,725 in foregone monthly income.

For a Combined Plan participant retiring at age 60, the factor is $7.26 per $1,000, so the same $25,000 PLOP reduces the monthly benefit by $181.50. At age 65, the factor is $7.79 per $1,000.

The reduction also affects your survivor benefit calculations and COLA base. A PLOP shrinks not just what you receive — it shrinks what your beneficiary would receive after your death.

The Three Ways to Receive PLOP Funds

Direct Payout

STRS Ohio sends a check directly to you. This triggers mandatory 20% federal income tax withholding immediately. If you retire before the calendar year you turn 55, you may also face a 10% IRS early withdrawal penalty. Ohio residents owe state income tax on the distribution as well.

Direct Pretax Rollover

You direct STRS Ohio to transfer the PLOP funds directly into an eligible retirement account — the Ohio Deferred Compensation 457(b) Plan, a 403(b), or a Traditional IRA. No immediate federal or state tax. No early withdrawal penalty. The money stays tax-deferred until you draw from it later.

60-Day Indirect Rollover

You receive the check (with 20% withheld for federal taxes), then deposit the full gross amount into an IRA or qualified plan within 60 days. To roll over 100%, you have to replace the 20% withholding out of pocket. Any amount not rolled over within the 60-day window is treated as a taxable distribution.

When You Get the Money

PLOP distributions are not paid on your retirement date. STRS Ohio disburses the lump sum exactly 91 days after your retirement effective date or 91 days after your account is finalized, whichever comes later. If your employer's final payroll report takes time to process, the 91-day clock may not start until finalization is complete.

Plan your household cash flow around this delay. If you're taking a PLOP to pay off a mortgage or fund a large purchase at retirement, you'll need bridge funds for the first three months.

Spousal Consent Requirements

If you're married and elect a PLOP of any size, you need a notarized Spousal Consent Form on file with STRS Ohio before your retirement effective date. This is true regardless of which Plan of Payment you choose alongside the PLOP. Without spousal consent, STRS Ohio defaults your retirement to a Joint and Survivor Annuity with 50% to your spouse and zero PLOP.

Making the Decision

The PLOP works best when you have a specific, time-sensitive use for the cash that outweighs the permanent monthly reduction — paying off high-interest debt, covering a gap before Social Security kicks in, or funding an immediate expense that would otherwise drain savings earning less than the pension's implied rate of return.

It works against you when you take it simply because the cash feels good at retirement and then watch your reduced monthly check compound that loss over decades.

Our STRS Ohio Retirement Guide includes a PLOP tax worksheet that walks through the direct payout versus rollover comparison with your actual numbers, so you can see the long-term cost before you commit.

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