Clear Money Guide
What this guide covers
A quick view of the questions and evidence developed below.
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Updated August 19, 2026. Quick answer: Ohio Public Employees Retirement System (OPERS) — the COLA is automatic, and it does not compound, service credit can be purchased, and no DROP was found. Vesting takes 5 years in the Traditional Pension Plan; the Member-Directed Plan vests employer money on a graduated schedule instead. The four decisions below are the ones that are hard to reverse.
Provisional. This page is published at medium confidence. The specific points that could not be confirmed are listed under What could not be verified below, and are named rather than smoothed over.
The verdicts
| Is the COLA granted? | Automatic |
|---|---|
| Is the COLA compounded? | Not compounded |
| Vesting | Traditional Pension Plan: 5 years of contributing service credit earns eligibility for a reduced retirement benefit (Groups A/B at age 60; Group C at age 62) if the account is left on deposit rather than refunded. Member-Directed Plan: employer contributions vest on a graduated schedule — 0% under 1 year, 20% at 1 year, 40% at 2, 60% at 3, 80% at 4, 100% at 5 years. |
| Buy service credit? | Yes |
| DROP? | None found |
| State | Ohio |
Those first two rows are separate questions and are routinely confused. Whether you get an increase at all is one thing; whether it compounds is another. A system can grant an increase automatically every year and still compute it against your original pension forever, which is a materially worse deal than it sounds.
The COLA
Traditional Pension Plan: a retiree who has received benefits for 12 months automatically receives an annual COLA on the anniversary of the retirement effective date. Not compounded — each year’s COLA is calculated against the member’s INITIAL retirement annuity, not the benefit plus prior COLAs. If CPI is negative, no increase is granted (but no cut either). An allowance equal to a percentage of the CPI, up to 3% (CPI-linked with a 3% annual cap), per the 1/2026-dated leaflet. No historical year-by-year rate table was found, so changes over time are unconfirmed.
Buying service credit
Military service (up to 5 years active duty, or up to 5 years as a POW); free military service (pre-Oct 13, 1994, up to 10 years at no cost if conditions met); exempt/previously-exempted service; out-of-state, federal government, or Ohio municipal retirement system service (max 5 years or total Ohio service credit, whichever is less); leave of absence (up to 1 year); interrupted military service (USERRA); unreported public service; elected/appointed official service; school board service (pre-6/30/1991); workers’ compensation leave time (max 3 cumulative years); plan-change service credit; redeposit of a prior refund (restores lost service credit); transfers from OP&F, Highway Patrol Retirement System, or Cincinnati Retirement System.
What it costs. Varies by category. Interrupted military (USERRA): employee contributions only on the salary the member would have earned. Exempt/elected-official service: based on the greater of earnable salary for the 12 months of contributing service preceding the purchase request, or final average salary. Law-enforcement/public-safety conversion: full actuarial liability of the conversion, reduced by the non-law lump-sum benefit otherwise payable. Redeposit of a refund: amount originally refunded, plus interest. Plan-change service credit: cost determined by a calculation recommended by the OPERS actuary. Purchases are capped at a 60-month payment window; unpaid balance after that must be paid in one lump sum or the remaining credit is permanently forfeited.
Run your own numbers before deciding — some purchases never recover their cost, and the calculator shows which.
Traditional and Member-Directed do not vest the same way.
The Traditional Pension Plan vests in five years; the Member-Directed Plan vests employer money on a graduated schedule instead, so leaving early costs a different amount under each. Which one you are actually in decides what a refund is worth. The matching service below introduces you to advisers who pay to meet you.
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Taking a refund
Traditional Pension Plan: 100% of employee contributions plus interest, plus an additional amount if qualified service credit is ≥5 years (33% of eligible contributions) or ≥10 years (67%); refund requires 2 months since termination and no return to OPERS-covered employment before issuance. Member-Directed Plan: employee contributions plus actual investment gains/losses, plus the vested percentage of employer contributions; non-vested employer contributions are forfeited. A refund removes the associated service credit. Per OPERS' leaflets, protections that accrue to members who leave their account ON DEPOSIT — eligibility for a reduced retirement benefit at 5+ years, disability-benefit eligibility, and qualified-survivor benefits — are tied to that on-deposit service credit, which a refund removes. Non-vested employer contributions are explicitly forfeited (Member-Directed Plan). Only certain service-credit types (including redeposited/restored service) count toward OPERS health care/HRA eligibility, implying refunded-and-not-redeposited service does not count toward that eligibility. Note: this is a documented inference from OPERS' on-deposit-vs-refund language rather than a single explicit forfeiture clause for every category. Traditional Pension Plan: YES — after returning to OPERS-covered (or other Ohio system) employment and contributing at least 18 months, a member may redeposit the amount withdrawn plus interest, which automatically restores the lost service credit. Combined Plan: YES for members still participating as of Dec 31, 2021. Member-Directed Plan: NO — OPERS states members cannot restore or purchase refunded Member-Directed Plan participation in any of the three OPERS plans.
This is the irreversible one. Refund versus leaving it in sets out the decision in the order it should be made.
DROP
No OPERS official material reviewed (Traditional Pension Plan features page, 'Retiring from Public Employment' leaflet, 'Service Credit and Contributing Months' leaflet, 'Terminating Public Employment' leaflet, FAQ page) mentions a Deferred Retirement Option Plan (DROP) anywhere.
This is an absence-of-evidence finding: it means a DROP does not appear in the materials reviewed, not that the system has published a denial. DROP is rarer than it appears — of the twelve systems checked for this guide, only one has an active programme.
Survivor options
Traditional Pension Plan: (1) Single Life Plan — member-only annuity, no ongoing survivor annuity. (2) Joint Life Plan — one designated beneficiary receives 10%-100% of the member's benefit after death; if married, a 50% Joint Life benefit to the spouse is required unless spousal consent to do otherwise is obtained. (3) Multiple Life Plan — 2 to 4 designated survivor beneficiaries. Any can be combined with a Partial Lump Sum Option Payment (PLOP: 6x-36x monthly benefit upfront, capped so reduced monthly benefit stays ≥50% of the unreduced amount). Partially irrevocable. Freely changeable before the finalized benefit/PLOP is issued. After finalization, changes are permitted only for: death of a designated beneficiary (automatic reversion/reallocation), marriage/remarriage (1-year window to add new spouse for marriages on/after June 6, 2005; anytime for earlier marriages), or divorce/dissolution/annulment (with consent or court order). Outside these triggers, the election is locked in. Once a PLOP payment is issued, no changes can be made to the plan of payment or PLOP amount — that portion is fully irrevocable.
What could not be verified
All facts from opers.org and official OPERS leaflets; no Ohio Revised Code sections independently pulled. Key caveats: most detailed mechanics apply specifically to the TRADITIONAL PENSION PLAN, not the Member-Directed or Combined plans. Group A/B/C hire-date cutoffs are unconfirmed. DROP absence is inferred from silence, not an explicit denial. Survivor-benefit reduction is actuarial/individualized, not a fixed percentage. Irrevocability of the survivor election is conditional (has enumerated exceptions), not absolute.
These gaps are stated because a plan-rule page that hides its own limits is worse than no page. Your member handbook is the authority, and where it and this page disagree, the handbook wins.
Sources
- https://www.opers.org/members/whatisopers/
- https://www.opers.org/members/traditional/plan-features/
- https://www.opers.org/members/traditional/retiring-from-this-plan/
- https://www.opers.org/members/traditional/refunding-from-this-plan/
- https://www.opers.org/members/library/
- https://www.opers.org/members/faq/
Read 2026-08-04.
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Related: buyback calculator · is buying service credit worth it · refund or leave it in · DROP explained.
General information drawn from IRS, Medicare, HUD and state statute and regulation, not legal, tax or financial advice. Continuing-care law is state law and differs materially between states; every figure here is year-labelled and every source named. Powers of attorney, guardianship and trusts are governed by STATE law and differ change, and interest rates published by the IRS change every month - never rely on a rate quoted on any page, including this one. We are not a law firm or a tax adviser, and this is not legal or tax advice.