Skip to main content

STRS January Special Meeting Board News Details

(The text below is reprinted from the news release by STRS on 1/21/11.)

RETIREMENT BOARD WILL CONTINUE DISCUSSION ON PENSION PLAN CHANGES AT ANNUAL RETREAT
During its special meeting on Jan. 21, 2011, the State Teachers Retirement Board continued its discussion about potential changes to its pension plan design to strengthen the financial condition of the pension fund. Feedback from the Statehouse had indicated that any final pension legislation for STRS Ohio should not include an increase in employer contributions. Further, the plan must also result in a funding period for the pension fund that does not exceed 30 years. The plan adopted by the board in October 2010 brought the funding period down to 35.1 years with the inclusion of an additional 2.5% in employer contributions - and to only 46.1 years without the additional employer contributions.

The board reopened its discussion about possible pension plan changes at its regularly scheduled meeting on Jan. 13; then continued that discussion today. After reviewing several scenarios' impact on the funding period, the board asked for additional options to review during the board's annual retreat at STRS Ohio scheduled for Jan. 26 and 27. The meeting on Wednesday, Jan. 26, will begin at 1 p.m.

The components contained in these scenarios include member contributions, age and service requirements for retirement eligibility, benefit formula, final average salary (FAS) period, and the cost-of-living adjustment (COLA), as well as the impact of moving the 1% employer contribution currently going toward the STRS Ohio Health Care Program to the pension fund. Changes affecting only new hires, including moving them into a defined contribution plan, would not be enough to move the pension fund from its infinite funding period. Consequently, the board's goal is to come up with a combination of changes affecting both active and retired teachers that results in a funding period of 30 years or less.

The 30-year funding period is a "measuring stick" used by the Ohio Legislature to assess the solvency of Ohio's public pension funds. The funding period refers to the number of years required to "pay off" a pension fund's unfunded liabilities. In layman's terms, this would be similar to a home mortgage. A lender doesn't expect the homebuyer to have all of the money up front for a 30-year mortgage, but it does expect the buyer to have a plan to pay it off over the course of the mortgage. Similarly, STRS Ohio's plan must result in its ability to "pay off" its unfunded accrued liabilities over no more than 30 years.

Popular posts from this blog

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,

STRS January Board News Details

(The text below is reprinted from the news release by STRS on 1/15/2010.) NEW MEMBER JOINS RETIREMENT BOARD Joining the State Teachers Retirement Board at its January meeting was Dr. Daniel J. Martin, who was recently appointed to the board by Treasurer of State Kevin L. Boyce. Martin is currently the president of Mount Vernon Nazarene University. Before assuming this position in 2007, he served as the vice president for University Advancement at Point Loma Nazarene University in San Diego, as well as in various positions with MidAmerica Nazarene University in Olathe, Kan. He holds two doctorate degrees in higher education from the University of Pennsylvania and The University of Kansas, as well as a law degree and a master's in business administration from The University of Kansas. His four-year term on the board will run through Jan. 7, 2014. BOARD CONSIDERS CHANGE TO SERVICE CREDIT RULE FOR PARTIAL YEARS OF TEACHING Currently, STRS Ohio members who are employed on a full-t

September Board News

(The text below is reprinted from the news release by STRS on 9/19/2014.)    Board Reviews Enterprise Risk Management At the September meeting of the State Teachers Retirement Board, STRS Ohio’s chief financial officer Paul Snyder reviewed how the pension system identifies and addresses enterprise-wide risks. Snyder shared that enterprise risk management (ERM) provides a framework and a systematic approach for effectively evaluating and managing operational uncertainty and allows STRS Ohio to respond by reducing risks appropriately.    Snyder explained that the executive director, in coordination with STRS Ohio’s senior leadership team, addresses overall system risks and provides updates to the board. Snyder also reviewed with the board that STRS Ohio’s ERM framework is focused on the following core risk areas:  Investment returns Regulatory/statutory compliance Actuarial results Member satisfaction Constituent/public relations Legislative change