The Pension Election You Only Make Once

If you worked for the state, a school district, a city, or a county, your retirement paperwork will include one page that outlives every other decision you make: the plan of payment election. Teachers, troopers, professors, snow plow drivers, and half of public Ohio will sign one. Most people fill it out in ten minutes. This week is about why it deserves ten hours.

WHAT THE ELECTION ACTUALLY IS

When an OPERS or STRS member retires, the system asks one deceptively simple question: how do you want your money paid? A single life annuity pays the biggest monthly check, and it stops when you die. The joint and survivor options pay a smaller check that keeps paying your spouse or another beneficiary after you are gone. Some plans offer a partial lump sum option, a PLOP, that hands you a piece up front in exchange for a smaller monthly amount, and certain plan types offer a full rollover instead of the annuity entirely. The election is largely permanent. You will make thousands of financial decisions in your life. This is one of the few you cannot revisit next year.

THE PART NOBODY SAYS OUT LOUD

Here is the piece that surprises people: under a single life election, the monthly benefit dies with you. Your pension is an income machine, not an inheritance. There is no pool of your money waiting for your kids, because that is not what a pension is. For a retiree whose pension is the whole plan, the biggest check is usually right. But plenty of Ohio public servants retire with the pension AND a healthy 403(b), 457, or IRA on the side. When the pension plus the portfolio already cover more than your life will ever cost, the election quietly stops being an income decision and becomes a legacy decision. The question is no longer which option pays me the most. It is what do I want to continue after me, and the answer changes the box you check.

THE COLA FINE PRINT

One more input people miss. A Social Security raise is automatic, tied to inflation by law. An STRS raise is not: the board votes on it, year by year. It approved 1.5 percent for fiscal 2026 and 1.6 percent for fiscal 2027, and there were years not long ago when the answer was zero. That is not a reason to panic. It is a reason to stress test. When I model these plans, I show the pension growing very little, and sometimes not at all, and we look at whether the life still works. Details like these are conversational, not steering wheels. They inform the decision without making it for you.

A SIMPLE EXAMPLE

Two retirements, same year. The first is a couple in Grove City: 31 years in the schools, a modest 403(b), and a spouse two years younger who will likely live two decades past her husband. For them the joint and survivor election was the whole ballgame, a somewhat smaller check today so that her income never depends on outliving anyone. The second was a law enforcement officer, retiring earlier than most careers allow, with real money already saved outside the system. His family history and his own read on his health told him he was not planning for a thirty year retirement, and what mattered most to him was what his kids would inherit. His plan type offered a full rollover, and he took it: a smaller guaranteed income in exchange for an account his family actually owns. Not every plan offers that door, which is exactly why you read your own options page instead of a neighbor’s. Same system, same year, opposite answers, both right. The election has no correct box. It has your box.

THE WHOLE IDEA

The biggest check is not always the best check. Before you sign the election, put it inside the whole plan: what your life costs, what the portfolio covers, who outlives you, and what you want to continue after your expiration date, which, fair warning, is the one deadline none of us gets to reschedule. Ten hours of thinking for a decision that pays out for thirty years is the best hourly rate in retirement. It is worth doing with someone who has sat through these elections before.

STILL WORKING? FILE THIS AWAY

If you are an OPERS or STRS member mid-career, the election is years away but its inputs are being built right now. Know which plan you are actually in, because traditional, member-directed, and combined plans offer different doors at the end. Keep your beneficiary forms current, since those govern what happens if you never reach the election at all. And know that the repeal of the WEP and GPO rules means many public employees now collect full Social Security alongside the pension, which changes how hard your pension has to work and how much freedom you will have at that election. The decision is single. The preparation is not.

WORTH A READ

Selecting a Plan of Payment (STRS Ohio)

1.6% Cost-of-Living Adjustment Approved for Fiscal Year 2027 (STRS Ohio)

OPERS Health Care and Open Enrollment (OPERS)

If your election is coming, or you signed one years ago and want to understand what it means for your family now, reply anytime. Happy to walk through your options page with you.

Curious what working together looks like? There is more at jcsretirementtaxadvisors.com, and if a conversation sounds easier, you can grab 30 minutes on my calendar whenever it suits you. No pressure, just a conversation.

Know someone who should be reading this? Forward it along, that is how most people find me. And if this was forwarded to you, one subscription at buckeyeretirementbrief.beehiiv.com gets you both briefs: retirement on Mondays, equity comp on Thursdays.

Jesse Stacy MTAX, CFP®, EA

JCS Retirement Tax Advisors

This newsletter is for education only and is not tax, legal, or investment advice for your situation. Pension options, PLOP availability, and rollover eligibility vary by system and plan type; verify your own options directly with OPERS or STRS Ohio. The examples are illustrative.