Alternative Retirement Plan (ARP) - Human Resources at Ohio State

Alternative Retirement Plan

Ohio’s state retirement systems were established to provide a secure retirement for the state’s public employees, including higher education faculty and staff. The state retirement plans and Ohio State’s Alternative Retirement Plan (ARP) provide flexibility so you can make choices that are right for you. The Office of Human Resources is pleased to provide this overview of the ARP so you can make informed decisions.

As a staff or faculty member of The Ohio State University, you have two options for selecting a retirement plan:

Upon hire, you are automatically enrolled into OPERS (staff) or STRS (faculty). If you are a new hire or have become newly ARP-eligible, the ARP may be elected within 120 days from, and including, the effective date of the eligible appointment. If OPERS or STRS is elected, you have 180 days from your eligibility date to select a plan within either system.

View a summary of the ARP plan using one of these charts:

ARP Information

If you wish to enroll in ARP, follow the steps below:

Step 1: Research available ARP providers

Things to consider:

  • Fees
  • Surrender charges
  • Investment returns

Step 2: Contact provider to open ARP (401(a)) account

Action Items:

  • Choose investments
  • Name beneficiaries

Step 3: Complete and submit Retirement Program Election form

This form must be submitted to OHR within 120 days of ARP eligibility date

In order to participate, use the Retirement Program Election Form. It is your responsibility to ensure the completed form is received by the Office of Human Resources by the close of business on the 120th day. If the 120th day falls on a Saturday, Sunday or university-observed holiday, you must submit the form by the close of business on the next day that is not a Saturday, Sunday or university-observed holiday. A confirmation e-mail will be sent when the form has been received. Your election is final and irrevocable.

If no election is received, the employee will remain in OPERS or STRS.

Once the Office of Human Resources receives your Retirement Program Election form, we will enroll you into ARP for the next applicable pay period. We will then send your form to OPERS/STRS to record your enrollment choice. If you have contributed to OPERS/STRS within your 120 day election window, any ARP-eligible funds will be transferred to your ARP provider by these systems.

Note:  The following information is subject to change at any time.

The Alternative Retirement Plan, a 401(a) account, is a defined contribution plan. In a defined contribution (DC) plan, the benefit is determined by the amount of the account balance and the payment option chosen at retirement. In this type of plan, you and Ohio State contribute a percentage of your pay to an individual account, and you decide how to allocate these contributions among a variety of investment options.

The retirement income is driven by several variables:

  • The performance of the investments choices you select
  • The amount of contributions deposited to your account (your contributions and the university’s)
  • The payment option you choose at the time of retirement

When participating in a defined contribution plan, state law requires that a portion of the employer contribution be sent to the state system to be applied towards the unfunded liability associated with the defined benefit plan, known as the mitigating rate. This amount may be adjusted up or down on a periodic basis. Learn more about the mitigating rate.

Under this plan, you make the retirement plan investment decisions. You can choose your investment allocations according to your tolerance for risk and your retirement time horizon (with certain limitations). A participant in this plan is willing to assume the investment risk and the possible rewards associated with long-term investing.

Vesting gives you ownership of your retirement assets, usually over a set period of time. Vesting begins at the age of 18. Any service prior to age 18 does not count towards ARP vesting.

Your employee contributions to your ARP account are immediately vested. There are multiple ways the employer portion can become vested:

  • 365 days of continuous employment (active service or unpaid/paid leave)
  • Death
  • Disability
  • Separation from service after age 65

If you have a break in service that is less than 365 days, then service accrued prior to the break counts for purposes of determining vesting of employer contributions.

If you have a break in service that is 365 days or more:

  • All prior service is disregarded for purposes of determining vesting of employer contributions; and
  • Any unvested employer contributions are forfeited.

If an employee holds a student position while contributing to ARP, service in that student position counts toward vesting; otherwise, employment in a student position does not count toward vesting.

Your account consists of contributions made by you and the university, as well as with any investment gains or losses you may have on those contributions.

Your contributions are made on a pre-tax basis; federal and state taxes are deferred until benefits are paid. Benefits are exempt from local and municipal taxes within Ohio, except school district income tax. Any investment return on your account earns is also tax-deferred. Consult your tax advisor for more information.

You can choose from a number of options:

  • Leave your account balance with your ARP provider.
  • Roll your vested account funds into another qualified account or IRA.
  • Receive the vested portion of your account in the following ways:
    • Partial or full cash withdrawal
    • Fixed-period payments over a set number of years
    • Systematic withdrawal
    • Single or joint life monthly annuity with continuing survivor protection

No additional benefits, such as health care or disability, are available.

Employees of Ohio public colleges and universities do not participate in the federal Social Security system, other than contributions to Medicare. If you are eligible for a Social Security benefit from other employment in addition to your ARP benefit, there may be a reduction in your Social Security benefit. Learn more about the Windfall Provision.

The employee selects the investments available under the selected provider.

Employees, along with the Ohio State University, make contributions to your retirement plan.

Staff Employees
If you participate in the ARP, the following contribution rates will apply:

  • Employee contributions: 10%1
  • Employer contributions: 14%1
    • 11.56%1 goes to your selected ARP account provider.
    • 2.44%1 goes to the OPERS Traditional Pension Plan to help fund past service liabilities, as required by law. This is also referred to as the mitigating rate.

Faculty Employees
If you participate in the Defined Contribution plan, the following contribution rates will apply:

  • Employee contributions: 14%1
  • Employer contributions: 14%1
    • 9.53%1 goes to your selected ARP account provider.
    • 4.47%1 goes to the STRS Defined Benefit Plan to help fund past service liabilities, as required by law. This is also referred to as the mitigating rate.

1 Subject to change based on amounts required by law.