Kevin Kroskey's Ohio Faculty Advisor

( The text below is reprinted from the news release by STRS.) Board Discusses Options to Reduce Amortization Period for the Pension Fund During the State Teachers Retirement Board’s annual retreat, board members reviewed several options to reduce the retirement system’s funding period. Ohio law requires the statewide retirement systems to amortize unfunded liabilities over a period of not more than 30 years, otherwise they must submit a board-approved plan to the Legislature to reduce the funding period to 30 years. STRS Ohio’s current funding period is 40.2 years. Pension reform laws passed in 2012 reduced STRS Ohio’s accrued liabilities by $15.7 billion and improved the system’s funded ratio to 66.3% from 56.0%. These reforms also reduced the retirement system’s funding period from infinity — but have not yet resulted in a 30-year amortization period. The board-approved plan to reach the 30-year target is due to the Ohio Legislature Feb. 21. During the funding discu...

( The text below is reprinted from the news release by STRS on 12/13/2013.)   2013 Annual Financial Statement Audit Completed At the December meeting of the State Teachers Retirement Board, CliftonLarsonAllen reported the results of its audit of the STRS Ohio financial statements for the fiscal year ended June 30, 2013. 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 — 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 2013 Comprehensive Annual Financial Report , which will be posted on the STRS Ohio website by Dec. 27, 2013. Copies of the report can also be requested by calling STRS Ohio’s Member Ser...

( The text below is reprinted from the news release by STRS on 11/22/2013.) Investment Staff Outlines Final Changes to Target Allocations During the November meeting of the State Teachers Retirement Board, Investment Department staff presented a review of the Statement of Investment Objectives and Policy and the Statement of Fund Governance. Included in this review was a proposed change to the STRS Ohio Total Fund target allocation. The changes proposed were the final phase of revisions called for during the 2012 asset-liability study. The target allocation weights are shown in the table below :    Asset Class Target Allocation    Liquidity Reserve 1%    Fixed Income 18%    Domestic Equities 31%    Intern...

The text below is reprinted from the news release by STRS on 10/18/2013. You'll note the pension funding ratio improved to 66% but is still well below where it needs to be even after strong recent market returns and pension changes. Teachers don't be surprised if additional future changes in the form of benefit reductions of some form are required.  --- Annual Actuarial Valuation Shows Improvement in STRS Ohio Funding; Consultant Provides Guidance on Funding Policy   At its October meeting, the State Teachers Retirement Board received a report of the annual pension valuation results from its actuarial consultant, Segal Consulting. The report provides a “snapshot” of the actuarial position of the retirement fund as of July 1, 2013. This is the first valuation completed using the new benefit structure resulting from the passage of pension reform legislation last fall. Segal’s report this year shows the funding period for the pension fund decrea...

(The text below is reprinted from the news release by STRS on 09/20/2013.) STRS Ohio Finance Staff Details New Pension Reporting Rules At the September meeting of the State Teachers Retirement Board, STRS Ohio’s Finance Department reviewed with the board how new Governmental Accounting Standards Board (GASB) rules will impact the way pension funds report unfunded pension liabilities in published financial statements beginning later this fiscal year. One of the more significant changes affects the discount rate used by pension funds with projected cash flows that are not sufficient to pay all projected future benefits. STRS Ohio currently uses a 7.75% discount rate (the assumed rate of return on investments). Many public pension plan administrators across the United States use discount rates in the 7.5%–8% range because that has been the typical historic average return for long-term investors with asset allocations primarily invested in stocks. If plan assets are not sufficient t...

(FROM the STRS Ohio eUPDATE) STRS Ohio launched its new responsive website today to improve members' access to information about their pension fund on multiple devices. While the site's web address remains   www.strsoh.org , the site will now "detect" how members are connecting to it and display content appropriately on their smart phone, tablet or desktop computer. The updated site also has been restructured to guide members to information related to the two key phases of teaching: "During Your Career" and "Receiving Benefits." Members can still access the "Personal Account Information" area by entering their username and password in the fields in the upper right-hand corner on the home page or by clicking "Login" in the same spot on any other page. Additional site enhancements include: • Interactive maps that show meeting and seminar locations that when clicked, link to a larger map that allow members to get driving ...

(The text below is reprinted from the news release by STRS on 08/16/2013.) STRS Ohio Posts +13.7% Total Fund Return in Fiscal Year 2013 At the August meeting of the State Teachers Retirement Board, Investment Department staff reported that the total fund return for the year ending June 30, 2013, was +13.7%, and the market value of assets at fiscal year end was $68.0 billion. The strong return for fiscal year 2013 exceeded the fund’s assumed actuarial return of 7.75% . All asset classes beat their benchmarks during the fiscal year except for domestic equities. The total fund return trailed the total fund benchmark for only the second time in the past 11 years . STRS Ohio’s 2014 Investment Plan   calls for only moderate growth in the capital markets in fiscal year 2014 . Fiscal 2013 0perating Expenses Total $4.7 Million Under Budget Final figures for fiscal year 2013 show that STRS Ohio’s total operating expenditures were approximately $4.7 million less than budge...