Kevin Kroskey's Ohio Faculty Advisor

(The text below is reprinted from the news release by STRS) Board Reviews Pension Funding Status and Weighs Next Steps At the November meeting of the State Teachers Retirement Board, STRS Ohio staff provided a recap of the annual pension valuation results and related funding data. The board received the pension fund’s annual valuation report in October that points to funding challenges ahead. The report showed STRS Ohio’s funding period — the amount of time needed to pay off the system’s unfunded liability — stands at 26.6 years, and the funded ratio is 69.6%. The pension fund has a net $2.8 billion in deferred investment losses that will be recognized over the next three years because investment returns were below the assumed return of 7.75% during the past two fiscal years. The valuation report also showed that the fund is seeing slower than anticipated growth in covered payroll and that benefit recipients are living longer and collecting benefits for longer than expected. The ...

(The text below is reprinted from the news release by STRS)   Annual Pension Valuation Shows Modest Improvement, But Indicates Challenges Ahead During the October meeting of the State Teachers Retirement Board, actuarial consultant Segal Consulting presented its July 1, 2016, report of the annual pension valuation results. The valuation report measures two sets of assumptions — demographic and economic — against the retirement system’s actual experience from the past year. Demographic measures include retirements, disability inceptions, withdrawals and mortality (the number of deaths among active members and benefit recipients). Economic measures include the rate of inflation, return on assets, salary increases and payroll growth. This year’s report shows the funding period — the amount of time needed to pay off the system’s unfunded liability — decreased to 26.6 years from 28.4 years, and the funded ratio increased slightly to 69.6% from 69.3%. During the presentation, Sega...

Retirement Board Continues Detailed Review of Health Care Program The State Teachers Retirement Board dedicated a significant portion of its September meeting to the STRS Ohio Health Care Program. Earlier this year, the board identified health care funding challenges as a key area of focus for 2016–17. The presentations at the September meeting included the results of member and retiree surveys, a report on how other states provide health care coverage for retired teachers and how STRS Ohio’s plan compares to the market.   STRS Ohio’s health care program covers nearly 130,000 individuals and paid $673 million in benefits during fiscal year 2015. The Health Care Fund is valued on a calendar year basis, and as of Jan. 1, 2016, its balance was $3.26 billion; however, there is currently no dedicated source of funds for the health care program. STRS Ohio no longer allocates 1% of the 14% employer contribution to the Health Care Fund because these funds are needed to strengthen th...

(The text below is reprinted from the news release by STRS) STRS Ohio's Total Fund Returns 0.92% for Fiscal 2016 At the August meeting of the State Teachers Retirement Board, Investment Department staff reported that STRS Ohio’s total fund return for the year ending June 30, 2016, was +0.92%. The return beat the total fund benchmark by 0.25%. The system’s active management of the funds, rather than relying on index funds, added approximately $85 million in value after all investment costs during the fiscal year. The 0.92% return was consistent with staff’s annual plan forecast of moderate, positive returns. This follows returns of +5.45% in fiscal year 2015 and +16.83% in fiscal 2014. The value of investment assets as of June 30, 2016, was $69.9 billion. Asset-Liability Study Begins; Consultant Shares Investment Return Expectations The Retirement Board’s investment consultant, Callan Associates, began STRS Ohio’s asset-liability study with a presentation that covered the timelin...

(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 He...

(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: Determine the components that deliver a plan that represents a good value; Evaluate the impact of additional he...

(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...