Kevin Kroskey's Ohio Faculty Advisor

(The text below is reprinted from the news release by STRS on 4/25/2014.) Board Reviews Proposed Changes to STRS Ohio Health Care Program for 2015 and 2016 During the April meeting of the State Teachers Retirement Board, STRS Ohio staff presented the Retirement Board a two-year health care plan for years 2015 and 2016. The recommendations continue building upon the multi-year strategic plan that began with the board’s December 2011 approval of a strategic health care program framework.   A key component of that framework is to extend the projected solvency of the Health Care Fund to 65 or more years by 2025. Staff recommended the changes outlined below with the board’s strategic framework in mind. The board will be asked to vote on these items at its May meeting.   Proposed Changes to STRS Ohio’s Health Care Program for 2015 Reducing the subsidy multiplier by 0.1% to 2.2% per year of service — continues the phased-in reduction that the board began in 2012. A re...

( The text below is reprinted from the news release by STRS on   3/21/2014.)   Retirement Board Takes Action to Improve Pension Funding At the March meeting of the State Teachers Retirement Board, the board took action to reduce the amortization period for the pension fund, voting unanimously to discontinue the current allocation to the Health Care Fund of 1% of the 14% employer contribution beginning   July 1, 2014 . This decision follows discussion that began at the Board Retreat in January and continued at subsequent board meetings. The Segal Company, STRS Ohio’s actuarial consultant, projects this change, coupled with smoothed gains from strong investment returns, will result in an amortization period of about 32 years. That puts STRS Ohio on track to reach a 30-year amortization period by 2016 — the time frame that was projected when pension reform legislation was passed in 2012. Ohio retirement systems are required by law to amortize unfunded liabi...

( The text below is reprinted from the news release by STRS.)   Retirement Board Will Continue to Share Potential Funding Improvements With Stakeholders At its February meeting, the State Teachers Retirement Board reviewed several options to reduce the amortization period for the pension fund and agreed that STRS Ohio will continue to involve stakeholders in the process of considering plan revisions. STRS Ohio is required by law to amortize its unfunded liabilities over a period of not more than 30 years. Since STRS Ohio’s current funding period is 40.2 years, the system is required to submit a board-approved plan to the Legislature to reduce the funding period to 30 years. The plan was submitted on Feb. 21.   The plan reviewed the significant impact that pension reform legislation had on the pension fund. STRS Ohio’s July 1, 2013 pension valuation shows pension reform reduced STRS Ohio’s unfunded liabilities by $15.7 billion and improved the system’s funded ratio...

( 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...