OPERS and Your Retirement: What Ohio Public Employees Need to Know
If you've spent your career working for an Ohio city, county, school district, or state agency, chances are you've been contributing to the Ohio Public Employees Retirement System, commonly known as OPERS. With more than one million members and retirees, OPERS is the largest public pension fund in Ohio and the 11th largest in the United States. It's a tremendous benefit, but it comes with a set of planning decisions that are more complex than most people realize.
At Ville Wealth Management, we work with a number of Ohio public sector clients and have developed a deep understanding of how OPERS fits into a comprehensive financial plan. Here's what we think every OPERS member should be thinking about.
Your Retirement Benefit: The Decisions That Matter Most
The OPERS pension is built on three things: your age, your years of service credit, and your earnings history. While that sounds straightforward, the decisions you make around your pension can have a lasting impact on your income for the rest of your life.
Know your plan type. OPERS offers three options: the Traditional Pension Plan (a defined benefit), the Combined Plan, and the Member-Directed Plan. Your entire planning strategy flows from which plan you're in. Two colleagues at the same employer can have very different benefits depending on which plan they selected and which membership group (A, B, or C) they fall into based on their hire date.
Timing your retirement matters more than most people think. Because your benefit is calculated based on a formula, delaying retirement even by a year or two can meaningfully increase your monthly pension for the rest of your life. We model early versus delayed retirement scenarios for every client approaching this decision.
The PLOP deserves a real analysis. The Partial Lump Sum Option Payment allows members to take between six and 36 times their Single Life Annuity amount at retirement in exchange for a reduced monthly benefit going forward. Whether the PLOP makes sense depends on your longevity assumptions, your investment outlook, and your overall income picture. It should never be a default choice.
The survivor benefit election is largely irrevocable. Choosing how your pension continues (or doesn't) after your death is one of the most consequential decisions an OPERS retiree makes. We stress-test every scenario before a client locks this in, because a poorly chosen election can cost hundreds of thousands of dollars in lost lifetime income.
Your COLA depends on when you retired. Retirees who began receiving benefits before January 7, 2013 receive an automatic 3% cost-of-living adjustment each year. Those who retired after that date receive a COLA tied to the Consumer Price Index, which was 2.6% for 2026. This distinction makes a real difference in long-term income projections.
Social Security: A Major Update You Need to Know About
For years, many OPERS members received reduced Social Security benefits, or no benefits at all, because of two federal provisions: the Windfall Elimination Provision (WEP) and the Government Pension Offset (GPO). These rules were designed to prevent public employees from receiving what lawmakers viewed as a "windfall" from collecting both a full pension and full Social Security benefits. For many Ohio public workers, however, they were simply unfair.
That changed in January 2025.
The Social Security Fairness Act was signed into law on January 5, 2025, permanently repealing both the WEP and the GPO. Approximately 230,000 Ohioans are directly affected. Some are now eligible for more than $1,000 per month in additional Social Security income. Retroactive payments covering benefits back to January 2024 were distributed by July 2025.
If you haven't revisited your Social Security strategy since this change, now is the time. Here's what to focus on:
Re-run your Social Security projections. The income floor for most OPERS retirees is now higher than previously modeled.
Spousal and survivor benefits may now apply. Many clients avoided filing for these specifically because GPO would have eliminated them. That barrier is gone.
The retroactive lump-sum payment has tax implications. That payment is taxable Social Security income for 2025, but the IRS allows an election to allocate prior-year payments back to the years they would have been received, which can reduce your tax bill. Coordinate this with your tax advisor.
Claiming strategy needs to be revisited. With Social Security now a meaningful income source for many OPERS retirees, when you claim matters more than ever.
Health Care: Know What You Have and What You Don't
OPERS offers a retiree health care benefit through a Health Reimbursement Arrangement and the OPERS Connector marketplace, but the coverage is not what many members assume. The dollar amount OPERS contributes toward your health care premiums is tied to your years of service, and it doesn't cover everything.
A few things to keep in mind:
At age 65, Medicare becomes your primary coverage. OPERS health benefits shift to a supplemental role. Many retirees are caught off guard by this transition, and poor timing around Medicare enrollment can result in permanent premium penalties.
If you retire before 65, you need a bridge plan. Whether it's ACA marketplace coverage, COBRA, or a spouse's employer plan, the gap between your retirement date and Medicare eligibility needs to be planned for and budgeted explicitly.
Health care costs will rise. This is not speculation; it is a consistent pattern. We build health care inflation of five to seven percent annually into retirement cash flow models for OPERS clients.
Long-term care is not covered. OPERS health benefits do not cover long-term care services. This is the most significant and most commonly overlooked gap in a public employee's retirement plan. It needs to be addressed separately, whether through insurance, a hybrid policy, or a dedicated self-insured reserve.
Your Investment Portfolio: Think Differently
When a client has an OPERS pension, we approach their investment portfolio differently than we would for someone without a guaranteed income source.
A defined benefit pension functions very much like a bond. It pays a predictable, guaranteed stream of income for life. That means the pension itself is already providing what most bonds in a portfolio are designed to do. For many OPERS clients, this creates a logical case for holding a higher equity allocation in their investment portfolio than they might otherwise feel comfortable with.
The portfolio's job in this situation is not to replicate the pension's income. It is to provide growth, flexibility, and legacy capital. That's a different mandate, and it should drive a different allocation.
For clients in the Member-Directed or Combined Plans, there are also real investment decisions to be made inside OPERS itself. We review the fund lineup and allocation within OPERS alongside any outside accounts to make sure the overall portfolio is coherent and not accidentally duplicating exposures.
Tax Planning: More Complex Than It Looks
OPERS pension income is fully taxable at both the federal and Ohio state level. Getting your withholding set up correctly from the first check is important, and many new retirees underestimate what they'll owe and face penalties as a result.
Ohio does offer a retirement income credit that applies to pension income. This is often missed, especially in the first year or two of retirement.
Beyond the basics, a few planning opportunities stand out for OPERS clients:
The Roth conversion window. The early years of retirement, before Social Security and required minimum distributions add to your taxable income, can be an ideal time to convert traditional IRA or 403(b) assets to Roth. With Social Security now higher for many OPERS retirees post-WEP/GPO repeal, this window may be narrower than it once was. Starting early matters.
IRMAA thresholds. Pension income, combined with Social Security and eventual RMDs, can push your modified adjusted gross income above the Medicare Income-Related Monthly Adjustment Amount thresholds, adding meaningful surcharges to your Part B and Part D premiums. Because IRMAA uses a two-year lookback, this requires proactive planning well before Medicare enrollment.
Final Average Salary timing. The OPERS pension formula is based on your highest earning years, typically the final three or five. Coordinating the timing of raises, overtime, and unused leave payouts in those final years can directly increase your pension benefit for life. This is an underutilized planning tool.
Cash Flow: Build the Floor First
Our approach to cash flow planning for OPERS clients starts with mapping the pension and Social Security income against essential spending needs. The gap between that income floor and total desired spending tells us exactly how much work the investment portfolio needs to do, and at what withdrawal rate.
A few additional items we work through with every OPERS client:
The survivor benefit election directly affects monthly cash flow. Electing a joint and survivor option lowers the monthly pension amount in exchange for continued income to a spouse after death. We model the break-even point and compare it to the survivor's own income sources before making this decision.
Re-employment rules are asymmetric. OPERS retirees must wait two calendar months before returning to work in a public sector position covered by OPERS. However, they can return to private sector work the very next day without any impact on their pension. Many retirees don't know this and unnecessarily delay consulting work, part-time income, or second careers.
Sick leave and vacation payouts deserve attention. Many public employers pay out unused sick leave and vacation time at retirement. This creates a meaningful one-time cash flow event that needs to be factored into the retirement-year tax picture.
Risk Management: You May Have More Than You Think
One of the more common mistakes we see with public sector clients is purchasing far more life insurance than they actually need. OPERS provides a survivor benefit after just 1.5 years of service credit, which pays a monthly income to designated family members after a member's death. This benefit is frequently overlooked when clients are reviewing their life insurance coverage.
OPERS also provides disability benefits to active members. These need to be reviewed alongside any employer-provided disability coverage to avoid gaps or redundancy.
The gap that most OPERS clients do not have adequately addressed is long-term care. We consider this the primary uninsured risk for most public sector retirees, and we address it explicitly in every plan.
Estate Planning: The Pension Ends With You
This is a conversation we have with every OPERS client, and it surprises people every time: beyond the elected survivor benefit, your pension income ends when you die. It does not pass to your children or your estate.
This means that clients who feel financially comfortable because of a strong pension may be significantly underestimating how much investable, legacy-able wealth they actually need to accumulate. We encourage shifting the estate planning focus toward personal IRAs, investment accounts, and life insurance as the true estate-building tools.
A few other estate planning considerations specific to OPERS:
Beneficiary designations are separate from your estate documents. Your OPERS beneficiary designation is not governed by your will or your trust. It must be reviewed and updated independently, particularly after major life changes.
Trusts generally cannot be named as a joint and survivor beneficiary. This creates coordination challenges between OPERS elections and trust-based estate plans. We work through this carefully with clients and their estate planning attorneys.
PLOP proceeds need an immediate plan. If a client takes the Partial Lump Sum, those dollars need a beneficiary designation and investment strategy from day one.
A Few Things Most People Don't Know
After working with OPERS clients for years, a few lesser-known facts tend to be genuinely surprising, even for longtime members:
Service credit can be purchased. OPERS members can buy back credit for prior military service, prior public service in other systems, and in some cases educational leaves of absence. Buying additional service credit can meaningfully increase the final pension benefit, and it is one of the most underused planning tools available.
Reciprocity exists across Ohio's retirement systems. OPERS has reciprocal agreements with STRS (teachers), SERS (school employees), OP&F (police and fire), and HPRS (highway patrol). Clients who worked in multiple Ohio public sector roles can often combine service credit across systems for eligibility and benefit purposes. Very few members are aware of this.
The WEP/GPO retroactive payment may have had a special tax treatment available. The IRS lump-sum election under IRC Section 86 allowed clients to allocate the retroactive Social Security payment back to prior tax years. Many CPAs missed this opportunity in 2025 filings. If this applies to you, it may be worth a conversation with your tax advisor.
Key Differences Between OPERS and STRS
If you've worked in multiple Ohio public sector roles, or if you're simply trying to understand which system applies to you, here's how OPERS and the State Teachers Retirement System of Ohio (STRS) compare.
Who They Cover OPERS covers the broadest group of public employees: county, municipal, and state workers, library employees, park district staff, and most other local government positions. STRS covers teachers and licensed educators in Ohio public schools, community schools, and universities.
Benefit Formula Both are defined benefit systems, but the formulas differ. STRS has historically used a 2.2% multiplier per year of service applied to the member's final average salary. OPERS formulas vary by membership group (A, B, or C) based on hire date.
Social Security Neither OPERS nor STRS members pay into Social Security through their public employment. This is precisely why the 2025 repeal of the WEP and GPO was significant for members of both systems.
Health Care Both systems offer retiree health care, but the structure and funding differ meaningfully. STRS has faced significant controversy in recent years over benefit cuts to health care coverage and cost-of-living adjustments, leading to trustee elections and ongoing reform efforts. OPERS has generally been more stable on this front.
Cost-of-Living Adjustments STRS suspended its COLA entirely for a period and has been working to restore it amid sustained member pressure. OPERS has maintained its COLA structure, providing either a flat 3% or a CPI-W based adjustment depending on when the member retired.
Investment Options Most career STRS members are in the Defined Benefit Plan, which has no member-directed investment option. However, STRS does offer a Defined Contribution Plan and Combined Plan that include investment choice for members who selected them early in their careers.
Retirement Eligibility Age and service requirements differ between the two systems and are further broken down by membership tier within each. If you have worked in both a teaching role and another public sector position, the reciprocity agreements between OPERS and STRS may allow you to combine service credit across systems for eligibility and benefit purposes.
Reach out to us to schedule a conversation
At Ville Wealth Management, we believe that Ohio public sector employees deserve the same quality of comprehensive financial planning as anyone else, and that planning well for an OPERS retirement requires specific knowledge, not just general financial advice.
If you are an OPERS member, a retiree, or someone approaching retirement from public service, we'd welcome the opportunity to walk through where you stand and what decisions are in front of you.
This article is provided by Ville Wealth Management for informational purposes only and does not constitute legal, tax, or investment advice. OPERS rules and benefit provisions are subject to change. Social Security information reflects provisions as of the publication date. Please consult a qualified financial, tax, or legal professional before acting on any information contained in this article.
Ville Wealth Management is a Registered Investment Adviser in the state of Ohio. Advisory services are only offered to clients or prospective clients where Ville Wealth Management and its representatives are properly registered or exempt from registration. “Likes” should not be considered a positive reflection of the investment advisory services offered by Ville Wealth Management. Brian Jaros is an investment adviser representative of Ville Wealth Management. The firm is a registered investment adviser and only conducts business in jurisdictions where it is properly registered, or is excluded or exempted from registration requirements. Registration as an investment adviser is not an endorsement of the firm by securities regulators and does not mean the adviser has achieved a specific level of skill or ability. The information presented on this post is believed to be factual and up-to-date, but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. Comments should not be construed as an offer to buy or sell, or a solicitation of an offer to buy or sell the investments mentioned. A professional adviser should be consulted before implementing any of the strategies discussed. Investments involve varying degrees of risk, and there can be no assurance that any specific investment or strategy will be suitable or profitable for a client's portfolio. All investment strategies can result in profit or loss.
