Kevin Kroskey's Ohio Faculty Advisor

(The text below is reprinted from the news release by STRS on 5/18/12.) Ohio Senate Passes Pension Reform Legislation; STRS Ohio Hopeful That House of Representatives Will Take Action Executive Director Michael Nehf reported at the May Retirement Board meeting that the Ohio Senate passed STRS Ohio’s long-awaited pension reform bill (Sub. Senate Bill 342) on May 16 by a 31–2 vote, paving the way for the House to hopefully take similar action yet this year. Retirement Board Chair Jim McGreevy expressed appreciation to the Senate and to the bill’s co-sponsors, Senate President Tom Niehaus (R-New Richmond) and Senate Minority Leader Eric Kearney (D-Cincinnati) for taking action on pension reform. McGreevy also complimented STRS Ohio stakeholders for their work in support of the bill. On May 8, the co-sponsors introduced four pension reform bills that were assigned to the Senate Insurance, Commerce and Labor Committee. In testimony that afternoon, Nehf told Committee members that the ...

(The text below is reprinted from the news release by STRS on 4/20/12.) Retirement Board Amends Plan to Strengthen the Financial Condition of the Pension Fund; Pension Design and Contribution Changes Approved The State Teachers Retirement Board voted to amend its plan to further strengthen the financial condition of the pension fund at its April meeting and hopes to see legislative action on its pension reform plan in the coming months. The board’s plan is projected to save about $13.3 billion in accrued liabilities, maintains a 1% employer contribution to STRS Ohio’s health care fund and does not include any increase in employer contributions. The board vote followed several months of discussion and study — including conducting an asset-liability study and a three-year actuarial experience review. All changes contained in the plan require legislative action by the Ohio General Assembly and the governor to be implemented. Components of the plan include: ·    ...

(The text below is reprinted from the news release by STRS on 3/26/12.) Retirement Board Reviews Pension Reform Plan Design Changes As previously reported in   Board News , the pension reform proposal passed by the State Teachers Retirement Board in January 2011 no longer meets the 30-year funding period required by the Ohio Legislature. At its March 22, 2012, meeting, the Retirement Board discussed various revisions to the current proposal, aimed at reaching the 30-year amortization goal. Earlier this month STRS Ohio staff presented several scenarios to reduce the system's liabilities and funding period. The Retirement Board asked for further study — including a potential cap on the cost-of-living adjustment (COLA) that is paid in retirement, and/or a one-year COLA suspension. Staff was also asked to consider ways to smooth the transition to new retirement eligibility rules that will include a longer teaching career and an age requirement to qualify for retirement. All of t...

(The text below is reprinted from the news release by STRS on 3/6/12.) Board Approves Changes to Actuarial Assumptions At a special meeting on March 2, the State Teachers Retirement Board voted to approve changes to the actuarial assumptions used to calculate pension liabilities. In February, the board's actuarial consultant, PricewaterhouseCoopers (PwC), presented the results of a three-year experience review used to evaluate the economic and demographic assumptions. The experience review, conducted at the board's request, compared what actually happened during the three-year period versus what was expected to happen to the financial and demographic assumptions. Based on its review, PwC recommended adjustments to assumptions about mortality, service retirement, inflation, expected investment returns and salary growth. In total, these new assumptions have a negative overall impact on the system's funding. The most common ...

(FROM the SERS newsletter) On December 1, 2011, Rep. Rex Damschroder of Fremont introduced H.B. 388, which proposes suspending the retirement benefit of public retirement system retirees who return to public employment. The intent of the bill was to address so-called "double-dipping," the term used when public employees retire, begin receiving a pension, and then return to public employment to collect both a pension and a paycheck. The bill proposes deferring a reemployed retiree's pension into an account maintained by the retirement system during the time the person is reemployed. This would prevent a reemployed retiree from receiving a pension and a paycheck at the same time. Once the person retires from public service, the deferred pension money that accumulates in the account while the person was reemployed would be refunded either as a lump sum or monthly annuity.

(The text below is reprinted from the news release by STRS on 2/20/12.) Pension Legislation Could Move in Ohio Senate STRS Ohio's director of governmental relations Terri Bierdeman reported to the board that Ohio Senate leaders are open to moving pension legislation before its summer break. Senate leaders met with representatives from each of the five public pension systems separately to share this new development and to discuss how best to proceed. The legislators would like pension plan design changes to include a smoother transition to new retirement eligibility rules than what was originally proposed by the systems. Any change in this regard, along with any delay in STRS Ohio's proposed July 1, 2012, implementation date, would cause STRS Ohio's plan to fall outside the 30-year amortization period that has been considered a key element of the system's pension reform plan. The board may consider other benefit changes to balance this cost. The Senate leaders also ...

(The text below is reprinted from the news release by STRS on 1/23/12.) Callan Associates Updates Retirement Board on Asset-Liability Study At the January meeting of the State Teachers Retirement Board, the board's investment consultant, Callan Associates, provided additional research that the board requested in December as part of its asset-liability study. The study will help the board determine the optimal portfolio allocation for the system's assets. Last month, Callan presented five potential asset mixes for the board to review, along with the projected short- to medium-term rates of return for those mixes. At that time, the Retirement Board asked Callan to provide information on two additional asset mixes. The board will discuss these results further at its February meeting. The preliminary results of the asset-liability study showed that STRS Ohio's current investment policy target would be challenged to achieve an 8% return during the next five to 10 years; howeve...