Tuesday, July 5, 2016

June Board News

(The text below is reprinted from the news release by STRS)
 
Retirement Board Chair, Vice Chair Named
During its June meeting, the State Teachers Retirement Board elected contributing teacher member Mark Hill (Worthington City Schools, Franklin County) as its vice chair for the coming year. According to Board Policies, retired teacher member Robert Stein, who is currently serving as vice chair, automatically moves into the position of chair. Stein and Hill will assume their new responsibilities on Sept. 1, 2016. Board members receive no compensation for serving on the board other than reimbursement for actual, necessary expenses.

Retirement Board Approves Health Care Premiums for 2017
The Retirement Board approved 2017 premiums for all plans offered through the STRS Ohio Health Care Program. A complete list of these premiums is available here, or can be obtained by calling STRS Ohio’s Member Services Center toll-free at 888‑227‑7877. Additional information about the 2017 Health Care Program will be provided in upcoming newsletters and on the STRS Ohio website. In late October, all eligible benefit recipients will receive personalized health care plan information in preparation for the fall open-enrollment period that extends from Nov. 1–22, 2016.

When determining premiums, the Retirement Board and STRS Ohio staff consider the claims experience of plan enrollees, as well as annual health care cost trend rates. The 2017 premium subsidy will reflect a reduction in the years-of-service multiplier for non-Medicare plan enrollees to 1.9% per year of service. This means retirees with 30 or more years of service who are not enrolled in Medicare will receive a premium subsidy of 57% in 2017.

Below is a sample of monthly premiums for calendar year 2017 for a benefit recipient with 30 or more years of service.
 


 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
CEM Ranks STRS Ohio First in Member Service
CEM Benchmarking, a leading global benchmarking company, reviewed with the board the results of its Pension Administration Benchmarking report for fiscal year 2015. STRS Ohio was benchmarked against 53 leading global pension systems from the United States, Canada, Denmark, The Netherlands, Scandinavia and the United Arab Emirates that serve more than 25 million active members and annuitants. STRS Ohio’s service level score was the highest among all participants, and the Call Center also ranked first among all participating systems.

The CEM study also measures systems’ costs to provide service. STRS Ohio’s cost per member was higher than the average system cost for its 14-member peer group in fiscal 2015, but the study noted that STRS Ohio’s costs have trended lower since 2012, while the average costs for the peer group trended higher during this time frame.

Board Accepts Fiscal Year 2017 Investment Plan
The Retirement Board voted to accept the fiscal year 2017 Investment Plan presented by staff. The plan details staff investment strategy for each asset class in the system’s investment fund. The 2017 Investment Plan calls for modest growth in the capital markets.

The Retirement Board’s investment consultants, Callan Associates and Cliffwater LLC, reviewed and expressed support for the Investment Plan. Staff will evaluate the need to issue an addendum to the Annual Investment Plan once market levels are set on June 30, 2016. STRS Ohio will post the fiscal year 2017 Investment Plan on its website in early July. A copy of the plan is also available by request through STRS Ohio’s Member Services Center, 888‑227‑7877 (toll-free).

Retirements Approved
The Retirement Board approved 271 active and 85 inactive members for service retirement benefits.

Fiscal Year 2017 Budgets Adopted
The Retirement Board adopted the proposed budgets for fiscal year 2017 (July 1, 2016–June 30, 2017). The fiscal 2017 operating budget totals $96.9 million, an increase of 1% over the amended fiscal 2016 budget. The adopted capital budget for fiscal year 2017 totals $3.25 million, an increase of 3.5% over the current year budget.

The board also approved an amended budget request for the current fiscal year for an additional $900,000. Savings identified by various departments were offset by higher than projected costs for performance-based incentive payments, unused vacation and sick leave due to retirement payouts, custodial banking fees and building maintenance and equipment. The Board voted to adopt the budgets effective June 24, 2016.

Board Adopts Updates to Strategic Goals
The board adopted updates to STRS Ohio’s Strategic Goals document that executive director Michael Nehf presented in May. The changes include adding a new strategic goal to address STRS Ohio’s health care funding challenges, as well as adding a new objective to address business continuity and disaster recovery capabilities.

Other STRS Ohio News

STRS Ohio earns GFOA Certificate of Achievement for its Comprehensive Annual Financial Report

STRS Ohio recently learned that its Comprehensive Annual Financial Report (CAFR) for fiscal year 2015 qualified for the Government Finance Officers Association’s (GFOA) Certificate of Achievement for Excellence in Financial Reporting. STRS Ohio has received the award each year since 1990. Staff consolidates financial, investment, actuarial and statistical information into one publication that meets the standards established by the GFOA to receive this recognition.

Thursday, June 2, 2016

May Board News

(The text below is reprinted from the news release by STRS)
 
Myers Wins Board Seat
Contributing teacher member Tim Myers was reelected to the State Teachers Retirement Board in the 2016 election. The term for this seat begins Sept. 1, 2016, and ends on Aug. 31 2020.
 
Board Considers Updates to Strategic Goals Document
During the May meeting of the State Teachers Retirement Board, STRS Ohio executive director Michael Nehf reviewed changes that staff is recommending to STRS Ohio’s Strategic Goals document. The Strategic Goals document provides an overview of the retirement system’s goals, along with objectives and initiatives developed to meet the approved strategic goals.
 
Staff’s recommended changes include adding a new strategic goal to address STRS Ohio’s health care funding challenges. Proposed objectives under this new goal include:
  1. Determine the components that deliver a plan that represents a good value;
  2. Evaluate the impact of additional health care plan changes on enrollees and the health care program’s funding;
  3. Work with membership and stakeholder groups on approaches to increase funding; and
  4. Continue open and honest communication with the membership and stakeholders.
 
Staff also recommended adding a new objective to address business continuity and disaster recovery to the current strategic goal, “Ensure a high level of quality service to STRS Ohio members.” The proposed objective will direct staff to focus on further strengthening business continuity capabilities.
 
Staff requested that the board take action on these proposed updates at its June meeting.
 
Board Reviews Preliminary 2017 Health Care Premiums; Amends April Reduction in Subsidies for Non-Medicare Benefit Recipients
At its April meeting, the Retirement Board approved changes to the health care program for 2017, and some of these changes impact the premiums that enrollees will pay next year. At its May meeting, the board got a first look at proposed health care premiums for the 2017 plan year. Staff conferred with health care consultants and actuaries to determine the expected costs for the self-insured and fully insured programs.
 
Due to action the board approved in April to reduce the subsidy multiplier to 1.8% per year of service (from 2.1%) for non-Medicare benefit recipients, proposed premiums climbed sharply for this group. Following discussion during the May meeting, the board voted to amend its action taken at the April meeting, changing the subsidy multiplier to 1.9% per year of service for non-Medicare benefit recipients — a move that reduces the proposed premium increase for this group. Next month, the board is expected to vote on health care premiums for the 2017 plan year. Once approved, the premiums will be posted on STRS Ohio’s website.
 
Retirements Approved
The Retirement Board approved 38 active members and 76 inactive members for service retirement benefits.
 
Other STRS Ohio News
 
Defined Contribution Plan Assets Reach $1 Billion
Nearly 15 years after its inception, assets in the STRS Ohio Defined Contribution (DC) Plan exceeded $1 billion in April 2016. A total of 20,505 members are enrolled in the DC and Combined plans, with 63% in the DC Plan and 37% in the Combined Plan. Members enrolled in these plans have 16 allocation options managed by STRS Ohio. One option is the STRS Total Guaranteed Return Choice that provides a guaranteed interest rate on contributions and transfers. In addition, there are seven different Target Choice Options that pinpoint a year in the future that would roughly match a participant’s retirement date and adjust allocations over time. Other options range from the conservative STRS Money Market Choice to a small company equity choice and an international equity index.

Monday, May 2, 2016

April Board News

(The text below is reprinted from the news release by STRS)
 
Board Approves Health Care Program Changes for 2017; Long-Term Health Care Funding Discussions to Continue
At its April meeting, the State Teachers Retirement Board approved changes for the 2017 health care program that are designed to help reduce STRS Ohio’s long-term plan costs and extend the solvency of the health care fund. Due to increasing claims costs and the lack of a dedicated source of funding, STRS Ohio is facing significant health care funding challenges. The approved changes do not provide a long-term funding solution for the health care fund. The changes are projected to extend the solvency of the health care fund by two to three years beyond the projected 15-year solvency period reported last month in Segal Consulting’s annual actuarial valuation.
 
The board is exploring long-term funding solutions for the health care program that would allow STRS Ohio to continue a health care program that is of value to members. Throughout the discussion of possible options, STRS Ohio will use its website, newsletters and eUPDATEemail news service to keep members informed.
 
Following reviews that took place during its February and March meetings, the Retirement Board approved the changes outlined below to the STRS Ohio Health Care Program for 2017:
 
Plan design changes for 2017:
  • The Alere disease management program for non-Medicare enrollees will be discontinued.
  • Emergency room copays will increase to $75 from $65 for Medicare plan enrollees.
  • Medical Mutual non-Medicare enrollees residing outside of Ohio will move to a Basic Plan administered by Aetna.
  • Urgent care copays will increase to $40 from $35 for all plans.
  • Health care plans offered by HealthSpan will be discontinued.
  • Coverage for proton pump inhibitors (PPIs) will be discontinued for non-Medicare enrollees.
  • Preferred network for retail pharmacies will be adopted and copays at non-preferred network pharmacies will increase by $10.
  • Diabetic prescriptions copay will increase to the full copay from a one-half copay.
  • Specialty drugs coinsurance percentage will increase to 13% from 10%, and the per prescription maximum will increase to $550 from $500.
Eligibility changes for 2017:
  • Medicare Part B premium reimbursements for survivors and beneficiaries who were age 65 by 2008 will be discontinued.
  • Coverage for sponsored dependents of unmarried retired teachers will no longer be offered. This does not include incapacitated adult children.
  • Premiums for dependent children will be changed to a per child premium.
Subsidy changes for 2017:
  • The subsidy multiplier for non-Medicare benefit recipients will be reduced to 1.8% per year of service from 2.1%.
  • The Medicare Part B premium reimbursement will be phased out over a three-year period, beginning in 2017.
Proposed Reduction to Mitigating Rate Included in Omnibus Pension Legislation
STRS Ohio staff has been working with Rep. Kirk Schuring (R-Canton) on a bill that would make technical corrections to Chapter 3307 of the Revised Code which governs STRS Ohio. The bill also addresses chapters of Revised Code governing the other Ohio retirement systems. Most of the corrections address items related to the passage of pension reform in 2012. Rep. Schuring introduced the bill (House Bill 520) on April 13.
 
In addition to the corrections requested by STRS Ohio and the other retirement systems, the bill included language to change the way the mitigating rate for the Alternative Retirement Plan (ARP) is calculated. The mitigating rate is a portion of the employer contribution that is necessary to offset the negative impact on the retirement system of participation in an ARP.
 
Under the bill, the Ohio Retirement Study Council would no longer calculate the rate. Instead, STRS Ohio would be required to contract with an actuary to determine the ARPmitigating rate based on a statutory formula. The mitigating rate would be one-fourth of the rate calculated under this formula, with a cap of 4% — which is below STRS Ohio’s current mitigating rate of 4.5%. STRS Ohio opposes the mitigating rate proposal in its current form and intends to work with the bill’s sponsors to address concerns regarding the language. The bill has not yet been referred to a committee for hearings.
 
Proposed Operating Budget for Fiscal Year 2017 Calls for 1% Increase Over Current Year; Fiscal 2016 Budget Amendment Requested
The Finance Department proposed system budgets for the 2017 fiscal year (July 1, 2016–June 30, 2017) during the April meeting. The proposed operating budget totals $96.9 million, an increase of 1% over the amended fiscal 2016 budget. The proposed budget reflects 556 full-time equivalent associates, down from 572 in the current year. The proposed capital budget for fiscal 2017 totals $3.2 million, an increase of 3.5% from the current year’s budget.
 
STRS Ohio’s amended budget request for the current fiscal year calls for an additional $900,000. Savings identified by various departments were offset by higher than projected costs for performance-based incentive payments, unused vacation and sick leave — due to retirement payouts, custodial banking fees and building maintenance and equipment.
 
Retirements Approved
The Retirement Board approved 64 active members and 81 inactive members for service retirement benefits.
 
Other STRS Ohio News
 
Online Services Gain Popularity
In March, STRS Ohio members and benefit recipients completed 35% of bank changes, 73% of tax changes and 59% of member beneficiary designation changes using online options through their Online Personal Accounts. The ability to change death benefit and reemployed retiree beneficiary changes online was recently implemented as well.

Wednesday, April 6, 2016

March Board News

(The text below is reprinted from the news release by STRS)
 
Solvency Period for Health Care Fund Drops to 15 Years; Board Exploring Options to Preserve Plan
 
At the March meeting of the State Teachers Retirement Board, Paul Snyder, deputy executive director — Finance and chief financial officer, presented results of Segal Consulting’s annual actuarial valuation of the Health Care Fund. The report shows the funded ratio for the Health Care Fund dropped to 63% from 74% last year. This means STRS Ohio has 63 cents on hand for every dollar needed to continue the current plan indefinitely. The valuation projects the Health Care Fund to remain solvent until 2031, a decrease of four years from last year’s valuation — and a decrease of 33 years from the 2014 valuation. The projected 15-year solvency period is an estimate ­— in actuarial terms, there is a 50% confidence level that the Health Care Fund has at least 15 years of solvency. Depending on the strength of financial markets, the amount of health care claims and whether additional funding is available, there is a chance the life of the fund could be 10 years or less.
 
The primary reasons for the decrease in the solvency period are: STRS Ohio no longer allocates 1% of the 14% employer contribution to the Health Care Fund, and 2015 investment returns did not meet STRS Ohio’s 7.75% assumption. The decision to discontinue the 1% allocation to the Health Care Fund was made in March 2014 so the 1% could be used to strengthen the pension fund.
 
The Health Care Fund is valued on a calendar-year basis. During 2015, the Health Care Fund earned a 2.5% rate of return. Costs for the health care program are paid out of the Health Care Fund, which is currently funded through premiums charged to enrollees, government reimbursements and investment earnings on these funds. The balance of the fund as of Jan. 1, 2016, was $3.26 billion, nearly $200 million below the $3.45 billion reported in the Jan. 1, 2015, valuation report. Benefit payouts during 2015 totaled $690 million, an average of more than $1.8 million per day.
 
The Retirement Board identified health care funding challenges as a key area of focus for 2016 during its annual planning meeting in January. The board identified several steps for staff to pursue while continuing to study potential funding solutions. These steps included:
  • Work with membership and stakeholder groups to determine the components that deliver a plan that represents good value and determine how long — with a high degree of confidence — STRS Ohio can offer a meaningful plan.
  • Evaluate the impact of additional health care plan changes in the areas of eligibility, plan design and subsidy levels.
  • Work with membership and stakeholder groups on approaches to increase funding for retiree health care.
  • Continue open and honest communication with membership and stakeholders
As in years past, STRS Ohio staff is working with the board to set 2017 coverage features, program eligibility and premium subsidies. In February, staff presented potential changes for the board to consider for the 2017 plan year. The board is reviewing these options, as well as working with staff regarding how to extend the solvency of the health care program. These potential changes can be found in the February Board News. STRS Ohio will continue to share information on these discussions, along with any actions taken — via the system’s website, newsletters and eUPDATE email news service.
 
Retirement Board Election Materials to Mail in April
 
The 2016 Retirement Board election packet will mail on April 1. It will include information about the two candidates — Cory R. King and Tim Myers — who are running for the one contributing member seat on the board that is up for election this year. The election packet will also include instructions for casting votes using the Internet, phone or mail. Those eligible to vote in this election include all STRS Ohio contributing members, individuals who have contributions on deposit at STRS Ohio and disability benefit recipients. The deadline for voting is May 2. STRS Ohio will announce the results of the election following certification of the election results by the board of tellers on May 7.
 
Board Approves Changes to Board Policies, Including Funding Policy
 
The board adopted amendments to its Board Policies at the March meeting, and the changes were substantially similar to those presented by general counsel at the board retreat in January. Included in these amendments were changes to the board’s Funding Policy, which has been a key topic for the board for several months. The most recent changes to the Funding Policy were presented by staff at the February 2016 Retirement Board meeting. The updated policy includes the stated goal of managing “the risk of unanticipated benefit changes and to safeguard members’ benefits in the long term.” The policy also provides criteria for making decisions regarding changes to funding and benefits, as well as when those changes should be considered by the board.
 
The updated Board Policies will be available in early April on the STRS Ohio website, by selecting “Retirement Board” under “About Us.” The updated Funding Policy is available here.
 
Retirements Approved
 
The Retirement Board approved 70 active members and 53 inactive members for service retirement benefits.

Tuesday, March 1, 2016

February Board News

(The text below is reprinted from the news release by STRS)
 
Staff Presents Considerations for 2017 STRS Ohio Health Care Program Changes; Board Discussion Expected to Continue in March
During the February meeting of the State Teachers Retirement Board, STRS Ohio staff presented a number of items for the board to evaluate as it considers potential health care program changes for 2017. The presentation follows discussion that took place at the board’s annual retreat in January regarding the funding challenges facing the health care program.
 
Staff’s primary objective is to consider plan adjustments that remain consistent and competitive with the health care marketplace. The items submitted for consideration fall into three general categories: plan design, plan eligibility and plan subsidy. The board did not take action on any of the proposed changes and is expected to continue to discuss the items at its March meeting.
 
Plan design changes for consideration include:
  • Discontinue Alere disease management program for non-Medicare enrollees.
  • Increase emergency room copays to $75 from $65 for Medicare plan enrollees.
  • Increase in-network and out-of-network deductibles for Health Care Assistance Plan enrollees.
  • Move Medical Mutual non-Medicare enrollees residing outside of Ohio to a Basic Plan administered by Aetna.
  • Increase urgent care copay to $40 from $35 in all plans.
  • Discontinue health care plans offered by HealthSpan.
  • Discontinue coverage for proton pump inhibitors (all are available over the counter).
  • Adopt preferred network for retail pharmacies and increase copays at non-preferred network pharmacies by $10; narrow retail network for Medicare plan enrollees.
  • Discontinue the one-half copay program for diabetic prescriptions.
  • Increase coinsurance percentage for specialty drugs to 15% from 10% and the per-prescription maximum to $600 from $500.
Plan eligibility changes for consideration include:
  • Discontinue Medicare Part B reimbursements for survivors and beneficiaries who were age 65 by 2008.
  • Discontinue offering coverage to sponsored dependents of unmarried retired teachers (does not include incapacitated adult children).
  • Change dependent children premium to a per child premium.
Plan subsidy changes for consideration include:
  • Reduce STRS Ohio subsidy multiplier to 1.9% from 2.1% for non-Medicare enrollees.
  • Phase-out Medicare Part B reimbursement over three years.
  • Add $50 surcharge to enrollees who have Medicare Part B-only coverage.
The proposed changes focus on reducing STRS Ohio’s long-term plan costs and extending the solvency of the health care fund.
 
Board Receives 2015 Member Survey Results
At the February board meeting, Dr. Marty Saperstein presented the findings of the 2015 membership survey. Phone surveys were conducted in November and December with active members and retirees.
Notable findings from the survey results included:
  • Despite pension plan changes, most members have positive overall impressions of STRS Ohio.
  • Trust and confidence in STRS Ohio increased significantly for actives, while retiree’s feelings remained positive.
  • Compared with last year, more actives and retirees feel the pension system is financially sound.
  • Most members — actives and retirees — still consider their pension an excellent or good value.
  • Members clearly distinguish between their pension benefits and health care coverage; more consider their pension benefits an excellent or good value.
  • Most members are satisfied with communications and most believe STRS Ohio is open and honest in its communications. There continues to be growing interest in electronic and online communications.
  • Three out of five active members plan to teach longer than they originally thought, and the most common reason cited is the pension plan changes.
Board Considers Updates to Funding Policy, Strategic Goals
The Retirement Board and staff continued their work on refining the board’s funding policy. Executive Director Michael Nehf reviewed with the board a draft of a revised funding policy that includes the stated goal of managing “the risk of unanticipated benefit changes and to safeguard members’ benefits in the long term.” The draft policy lays out clear criteria for making decisions regarding changes to funding and benefits, as well as when those changes should be considered by the board.
The board also reviewed proposed changes to STRS Ohio’s strategic goals for 2016, including a new goal to address STRS Ohio’s health care funding challenges. Staff also recommended an addition to one of the current strategic goals that would address strengthening STRS Ohio’s business continuity capabilities. Board action on these updates could be considered at its March meeting.
 
Retirements Approved
The Retirement Board approved 176 active members and 173 inactive members for service retirement benefits.
 
Other STRS Ohio News
 
Health care fund drops by $196 million in 2015
Year-end analysis shows the health care fund net position was $3.258 billion as of Dec. 31, 2015, a decrease of $196 million from the prior calendar year net position of $3.454 billion. Premiums received from health care recipients in calendar 2015 increased to $331 million from $286 million in calendar 2014. Payments from the health care fund in calendar 2015 increased to $693 million from $658 million in 2014, a 5.3% increase. Effective July 1, 2014, the allocation of 1% of employer contributions to the health care fund was discontinued and directed to the pension fund, resulting in no employer contributions to the health care fund for 2015. Financial and claim information from the health care fund were provided to actuaries at Segal Consulting, who will present the health care valuation report to the board in March.
 
The next regularly scheduled board meetings are on March 16, 17 & 18, 2016.
 

Tuesday, January 5, 2016

December Board News

(The text below is reprinted from the news release by STRS)
 
Independent Report Shows STRS Ohio Has Lowest Investment Costs in Peer Group; Internal Investment Strategy Saves Millions of Dollars

At the December meeting of the State Teachers Retirement Board, CEM Benchmarking, a leading global research company, presented the results of its 2014 investment benchmarking study. This year’s report compared investment data for the five-year period ending Dec. 31, 2014, from 17 large U.S. public fund sponsors. Results of the study showed that STRS Ohio’s total investment costs were the lowest among the peer group, primarily due to STRS Ohio’s greater use of internal investment managers. The report stated that STRS Ohio saved about $103 million in 2014 by using internal investment managers for about three-quarters of the system’s assets. The savings is based on the peer group’s median external management costs.

The report also provided performance data and showed that STRS Ohio’s five-year total net return of 10.5% was in the top 25% of CEM’s U.S. public fund universe. The five-year return exceeds STRS Ohio’s assumed rate of return of 7.75%. CEM said STRS Ohio’s strong performance was due in part to its asset mix, which has a higher weighting in U.S. stocks and a lower weighting in fixed income than the peer group.
 
CliftonLarsonAllen Completes 2015 Annual Financial Statement Audit

CliftonLarsonAllen reported the results of its audit of the STRS Ohio financial statements for the fiscal year ended June 30, 2015. The report declared that the system’s financial statements were fairly stated in accordance with generally accepted accounting principles; further, no material weaknesses in internal controls or instances of statutory noncompliance were found. As a result, STRS Ohio received an unqualified audit — also known as a “clean” opinion — which is the highest level of opinion that an organization can achieve.

STRS Ohio’s financial statements are included in the 2015 Comprehensive Annual Financial Report, which will be posted on the STRS Ohio website by Dec. 29, 2015. The report can also be requested by calling STRS Ohio’s Member Services Center toll-free at 1-888-227-7877. In addition to the financial statements, the report includes investment, actuarial and statistical information about STRS Ohio.

Retirements Approved
The Retirement Board approved 158 active members and 61 inactive members for service retirement benefits.

Other STRS Ohio News

Health care coverage tax form to be issued in January 2016
In compliance with the Affordable Care Act (ACA), STRS Ohio benefit recipients will begin receiving 1095-B forms next year for tax year 2015. The 1095-B form reports each month during the year that minimum essential health care coverage has been provided. All STRS Ohio plans provide minimal essential coverage, which protects members from having to pay a penalty tax for not having qualified health care coverage.

STRS Ohio will directly issue one 1095-B form to each benefit recipient who was enrolled in an STRS Ohio Medical Mutual self-insured plan during any month in 2015. STRS Ohio will mail 1095-B forms in mid-January.

STRS Ohio’s fully insured plans (Aetna, AultCare, HealthSpan and Paramount) are responsible for issuing 1095s for all non-Medicare benefit recipient enrollees. Medicare benefit recipients enrolled in these plans will receive 1095-B forms from the Centers for Medicare & Medicaid Services (CMS) or their plan administrators.

STRS Ohio recognized for funding, administration
STRS Ohio received the Public Pension Standards Award for Funding and Administration for 2015 from the Public Pension Coordinating Council (PPCC). The Council is a confederation of the National Association of State Retirement Administrators, the National Council on Public Employee Retirement Systems and the National Council on Teacher Retirement. The awards recognize public pension plans that meet key standards in several assessment areas, including actuarial, audit, investments, benefit programs and communications.

The next regularly scheduled board meetings are on Feb. 17, 18 & 19, 2016.

Tuesday, December 8, 2015

November Board News

(The text below is reprinted from the news release by STRS)
 
Board Subcommittee Continues Discussion on Funding Policy
During the November meeting of the State Teachers Retirement Board’s Ad Hoc Committee to Study Funding Policy, committee members continued to discuss the board’s funding policy and reviewed a proposed scorecard that would measure and summarize various financial data. These measurements could then be used to determine the financial health of the Defined Benefit Plan. The key metrics discussed included the plan’s funded ratio (ratio of plan assets compared to accrued liabilities), funding period (the amount of time the fund projects it will need to reach 100% funded status), plan status forecast (the probability of significant deterioration of plan funding in the 10 years after the measurement date) and economic conditions (comparing recent investment returns in context of long-term expected returns).

Segal Consulting, the board's actuarial consultant, indicated the metrics noted above are necessary, sufficient, reasonable and appropriate. The board will continue to discuss its funding policy at its annual retreat in January 2016, and will evaluate under what conditions it might consider potential changes to plan design if and when appropriate. These discussions are a part of the board’s commitment to help ensure a financially strong STRS Ohio.

Retirements Approved
The Retirement Board approved 381 active members and 74 inactive members for service retirement benefits.

Other STRS Ohio News

Retirement Board election process begins this month
On Nov. 6, STRS Ohio sent notices to all reporting employers and other interested parties about the upcoming Retirement Board election for one contributing member seat. In addition, election information is included in STRS Ohio’s fall newsletter and is posted on the STRS Ohio website. Individuals interested in running for a seat on the State Teachers Retirement Board can request petitions from STRS Ohio. The deadline for returning petitions is Feb. 26, 2016.

Center for Public Integrity scores Ohio a “D+” in integrity; “A” in pension fund management
Most of Ohio’s major daily newspapers — and many publications across the country — covered the latest report issued by the Center for Public Integrity that rated all 50 states on their laws and practices to promote government transparency and stop corruption. The report gave Ohio a D+ overall — the sixth highest score in the nation. Ohio’s top grade was in the category of State Pension Fund Management, where it was one of only three states to earn an A. STRS Ohio and the other Ohio funds answered a series of questions earlier this year that were used to develop the ranking. The questions focused on system controls to prevent conflicts of interest, to support transparency and ease of access to disclosures and pension fund documents.

The next regularly scheduled board meetings are on Dec. 16, 17 & 18, 2015.