OPERS Essentials: PLOP

Here’s how to receive a lump sum payment when you retire

By Michael Pramik, Ohio Public Employees Retirement System

March 5, 2019 – Most OPERS members can cash out a portion of their pension as a partial lump sum option payment, or PLOP, when they retire. How does this option work? Watch the latest video in the OPERS Essentials series, which explain various features of your OPERS retirement plan.

You can view all of the OPERS Essentials videos on our YouTube channel.

 

Michael Pramik

Michael Pramik is communication strategist for the Ohio Public Employees Retirement System and editor of the PERSpective blog. As an experienced business journalist, he clarifies complex pension policies and helps members make smart choices to secure their retirement.

Michael Pramik

Communication Strategist

  • Nice video, Michael. Regarding the 10% withdrawal penalty if under age 59 1/2: Is that only if I withdraw it early from an IRA later on before that age? In other words, if I just take a PLOP on retirement directly into a bank account at say age 54 does that get penalized?

  • Tom,
    I am looking to retire next year at 55, if I take a plop and have the money go directly to an IRA does it still get penalized or is the penalty only if the money is directly deposited into your personal checking or savings account?
    Thank you, Sean

    • Sean,

      If you receive a payment from a tax-deferred retirement plan before the age of 59 ½ and you do not roll it over to another qualified retirement plan, then in addition to regular income tax, you may be subject to an early withdrawal penalty by the IRS which is equal to 10% of the taxable portion. There are some exclusions to this early withdrawal penalty even if you take the distribution directly, but the exceptions vary for different types of retirement plans. One of the exclusions that applies to OPERS payments is if you are age of 55 or older in the year you separate service. To find out more about your personal tax liability those exclusions from the 10% penalty, you can talk to a professional tax advisor.

      Any portion that you rollover to another qualified retirement plan is not taxable.

      Julie, OPERS

  • I am retiring 02/01/2020. When can I expect my PLOP payment? I received a letter stating no sooner than 90 days after my first monthly benefit, which says I won’t receive that for 30-45 days after I retire. Am I reading this correctly? Do I really have to wait 1.5-4.5 months before I see any income?
    Any info is greatly appreciated.
    Thanks

    • You will receive your first benefit payment approximately 30 business days after we receive all valid documentation from both you and your employer, or your retirement effective date, whichever is later. If you chose a partial lump sum option payment, or PLOP, it will be released 90 days after your first benefit check.

      Julie, OPERS

  • Can you return full or partial PLOP should you later decide that you no longer need it, and would your monthly benefit be re-calculated?

    • Once you have retired, you can’t change your payment plan unless there is a life-changing event, such as the death of a spouse or a marriage if you chose a single life annuity. You cannot “cancel” a PLOP and return the money to OPERS.

      Julie, OPERS

  • I don’t think too many OPERS members know about the 100% Refund Option of their pension contribution plus up to 67% depending on years of service. At least, I did not know that until recently. This refund option is akin to a lottery winner opting for a lump sum instead of a 20 year annuity. An OPERS retiree may opt for full refund instead of receiving monthly pension as long as he or she lives. This option may be good for a smart/astute investor/retiree who believes he or she can invest his/her refund and earn enough return to pay himself/herself pension for as long as he/she lives. OPERS is basically doing the same thing on a large scale. It is investing retirees money and paying them guaranteed monthly pension from the returns on money invested.

    • If you refund your account, you will receive 100 percent of your member contributions. You may also be eligible for an additional amount depending on your retirement plan and years of service. Your account may be subject to federal and/or state taxes unless you roll over your account to another qualified retirement plan. More information is available on the OPERS website, https://www.opers.org/members/refunds.shtml.

      • Do you get all the employer contributions or just the employee contributions?

        The annual report illustrates the minimum/maximum amount of a PLOP and the effect on the monthly pension. Has OPERS considered a calculator to assist in determining the amount of PLOP other than the minimum/maximum an employee would like to have distributed and the effect on the monthly pension?

        • If you refund your account, the amount of employer contributions you will receive depends on your retirement plan and years of service. You can find more information through our refund estimator at https://www.opers.org/members/refunds.shtml. (Scroll down to “Do I get all my money back when I refund?”)

          There are several rules regarding the PLOP, so we recommend that if you are thinking of choosing this option at retirement to contact us.

          Julie, OPERS

  • Does it typically take 90 days to receive your PLOP after receiving your first retirement check. Because of the ongoing Covid-19 pandemic in Ohio, can you request to receive your PLOP within the first 45 days after your first benefit payment?

    • For further assistance please contact OPERS through the online account message center or by contacting us at 800-222-7377.

      • My mom and former co-worker received their PLOP within 45 days after 1st benefit payment. Is that the norm or will I have to wait the 90 day period. I’m still confused as to why their is a 90 day waiting period. Please advise…

        • The PLOP is issued no sooner than 90 days after the first benefit is paid. If you have additional questions please forward them through the online message center so we can review your account and provide account specific answers.

  • Well it’s 90 Days after I recieved my 1st Retirement payment , but I didn’t get my PLOP , I called and the Girl said that there was no Payout Date on my Account…..I know COVID has made things difficult but still this is messing up my plans to pay my House off …pretty disapointed.

    • We are only able to provide general information in this comment, if you need assistance please contact OPERS at 800-222-7377 or send a secured message through our online message center that is available through your online account. Our Member Services department will be able to help assist with your questions.

  • It’s been 90 Days since I retired and I haven’t gotten my PLOP . I called OPERS and was told there was no pay out date on myt Account , shouldn’t that be 90 Days for anyone/ Everyone ?
    I assume this is an oversight , but still I can’t help but be disappointed , what do You suggest ?

    • For further assistance please contact us through your OPERS online account message center so we can review you account specific information or contact us at 1-800-222-7377.

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