The School Employees Retirement System of Ohio (commonly known as SERS) continues to play a vital role in safeguarding the retirement security of thousands of non-teaching school employees across the state. From bus drivers to custodians, administrative staff, and food service workers, SERS ensures that Ohio’s education workforce has a reliable pension and benefit system to count on after years of service.
In 2025, the system has undergone significant developments, including cost-of-living adjustments (COLA), investment updates, changes in compensation rules, and governance decisions that will impact both current members and retirees. This comprehensive article dives deep into the details, offering a clear look at how the School Employees Retirement System of Ohio operates today, what recent updates mean for members, and what the future holds.
Understanding the School Employees Retirement System of Ohio
The School Employees Retirement System of Ohio is one of the state’s five public pension funds. Established in 1937, it was created to provide retirement benefits to school employees who are not covered by the State Teachers Retirement System (STRS) or other plans.
Key Facts About SERS:
- Covers over 200,000 members including active employees, retirees, and beneficiaries.
- Provides retirement, disability, survivor, and healthcare benefits.
- Funded by employer contributions, employee payroll deductions, and investment returns.
- Overseen by a Board of Trustees that makes critical decisions regarding contributions, benefits, and investment policies.
For many members, SERS is more than just a pension system—it is the guarantee of long-term financial stability after a career dedicated to supporting Ohio’s schools.
2026 COLA: Protecting Retirees’ Purchasing Power
One of the most notable announcements this year was the approval of a 2.5% cost-of-living adjustment (COLA) for eligible retirees in 2026.
Why This Matters:
- Inflation has eroded purchasing power for many retirees in recent years.
- The 2.5% COLA represents the maximum allowed under SERS rules, tied to the Consumer Price Index for Urban Wage Earners (CPI-W).
- Retirees who meet system requirements based on retirement date and waiting periods will see this increase reflected in their benefits.
For a retiree receiving $2,000 per month, the adjustment adds about $50 monthly, or $600 annually. While modest, this increase is meaningful for retirees balancing fixed incomes against rising living expenses.
Investment Performance and Asset Management
The strength of the School Employees Retirement System of Ohio depends largely on how well its investment portfolio performs. In 2025, the system reported solid results, further strengthening its position.
Highlights of Investment Performance:
- Annual return for the fiscal year ending June 30, 2025: 11.17%.
- Assets under management now exceed $20 billion.
- Long-term returns remain strong, placing the system in the top quartile among public pension funds nationwide.
SERS diversifies its investments across equities, fixed income, real assets, private equity, and increasingly, private credit.
New Investment Allocation: Private Debt
In 2025, SERS committed $75 million to a private debt fund. This move reflects a growing trend among pension systems to seek alternative investments that can provide steady returns in varying economic climates.
- Advantages: Higher yields and diversification.
- Risks: Less liquidity and reliance on careful borrower selection.
- Impact: Provides stability and income that can balance market volatility.
By making strategic moves like this, SERS shows its commitment to long-term sustainability.
Redefinition of Compensation Effective July 2025
A significant policy change takes effect on July 1, 2025, redefining what counts as “compensation” for pension calculations.
Key Points:
- Certain types of pay, allowances, or bonuses may no longer be included in retirement benefit formulas.
- Members approaching retirement must carefully evaluate how the changes will affect their final average salary (FAS).
- Employers are required to adapt payroll systems to ensure compliance.
For employees close to retirement, this update could slightly reduce their expected pension if previously included earnings are no longer counted. Awareness and preparation are essential to avoid surprises.
Board Elections and Governance
Governance plays a critical role in the health of SERS. In March 2025, board elections were held for two employee-member seats. These trustees will serve terms from July 1, 2025, through June 30, 2029.
Why This Matters:
- Trustees oversee billions in assets and make policy decisions impacting benefits.
- Elections ensure representation for active and retired members.
- Oversight from the Ohio Attorney General’s and Secretary of State’s offices adds transparency.
A strong governance structure ensures decisions are made with accountability and the best interests of members in mind.
Financial Health and Funding Status
The School Employees Retirement System of Ohio has consistently worked to maintain a strong funding ratio.
Current Status:
- The system’s funding ratio is approximately 79%.
- Employer contributions are set at 14%, above the actuarially required contribution rate of about 9.56%.
- Because SERS is above the 70% funding threshold, employer contributions currently go directly to pensions rather than healthcare funds.
This funding strength allows SERS to continue paying benefits while ensuring long-term sustainability.
Healthcare Benefits Through SERS
In addition to pensions, the School Employees Retirement System of Ohio provides healthcare coverage to eligible retirees. Rising healthcare costs make this an especially valuable feature.
Current Healthcare Offerings Include:
- Medical and prescription drug coverage.
- Dental and vision plans.
- Wellness programs to support retirees’ health and reduce overall system costs.
Healthcare remains one of the most critical components of SERS, giving retirees peace of mind beyond their monthly pension checks.
Member Services and Support
SERS offers multiple resources to help members plan for retirement and understand their benefits:
- Annual Benefit Statements that outline contributions and projected pensions.
- Retirement counseling both in-person and online.
- Employer reporting tools that ensure accuracy in contributions and payroll reporting.
- Educational workshops to help members navigate retirement decisions.
By combining technology with personalized service, SERS continues to improve accessibility for its members.
Challenges and Opportunities Ahead
Like any public pension system, SERS faces challenges, including demographic shifts and economic uncertainty.
Challenges:
- An aging retiree base increases benefit payouts.
- Healthcare costs continue to rise nationally.
- Market volatility can impact investment returns.
Opportunities:
- Strong governance and oversight can adapt to new realities.
- Innovative investment strategies such as private debt can enhance returns.
- Continued emphasis on transparency builds trust with members.
The balance between meeting current obligations and preparing for future demands will remain the central focus of the system.
Why SERS Matters to Ohio’s Education Workforce
The School Employees Retirement System of Ohio is not just about numbers and policies—it directly affects the lives of thousands of individuals. For many members, their pension is their primary source of income in retirement.
Benefits Provided by SERS Include:
- Guaranteed monthly pensions for life.
- Survivor benefits for spouses and dependents.
- Disability benefits for those unable to continue working.
- Healthcare coverage for eligible retirees.
These offerings ensure that those who keep Ohio’s schools running every day can retire with dignity and financial security.
What Members Should Do Now
With the updates in 2025, members should:
- Review their retirement statements to understand how the new compensation rules may affect benefits.
- Stay informed about investment performance and governance updates.
- Plan ahead for healthcare costs, using SERS resources.
- Consider additional retirement savings vehicles such as IRAs or 403(b) plans to supplement pensions.
Proactive planning ensures that members can make the most of their retirement benefits.
Frequently Asked Questions (FAQ)
Q: Who will receive the 2.5% COLA in 2026?
Retirees who meet eligibility criteria under SERS rules, including the required waiting period after retirement, will receive the adjustment.
Q: How does the new compensation definition affect my retirement?
It may reduce your pension if certain allowances or types of pay are no longer counted. Members close to retirement should carefully review their benefit estimates.
Q: Can I rely solely on my SERS pension in retirement?
While SERS provides a guaranteed income stream, many members supplement it with other retirement savings plans for added security.
In conclusion, the School Employees Retirement System of Ohio remains strong and adaptable in 2025. With a new COLA, redefined compensation rules, solid investment performance, and stable funding, SERS continues to protect the financial well-being of Ohio’s school employees. For both current workers and retirees, staying informed is essential to making the most of these valuable benefits.
How do you feel about the recent changes to Ohio’s retirement system for school employees? Share your thoughts and experiences below.
Disclaimer:
This article is for informational purposes only and should not be taken as legal, tax, or financial advice. Always consult with a qualified professional before making retirement or investment decisions.