(The text below is reprinted from the news release by STRS
on 11/22/2013.)
Investment Staff Outlines Final Changes to Target Allocations
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:
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If
approved by the board in December, the final allocation changes are expected to
be effective Jan. 1, 2014.
Board
Passes Revisions to Administrative Code Rules
At the
November Retirement Board meeting, the board approved several proposed
amendments to Administrative Code rules to comply with the pension reform
changes effective Jan. 1, 2014. Nine of the revisions addressed rules governing
the purchase of service credit, which changes the cost calculation to 100% of
the liability for most purchase service types. In addition, four of the rules
addressed health care eligibility and effective dates. The package of changes
will now be sent to the Joint Committee on Agency Rule Review, a legislative
committee, for review. These amendments were filed with an effective date of
Jan. 1, 2014.
Retirements
Approved
The
Retirement Board approved 545 active members and 132 inactive members for
service retirement benefits.
Other STRS
Ohio News
Retirement
Board Election Process Begins This Month
On
Nov. 8, notices were sent to all STRS Ohio reporting employers and other
interested parties about the upcoming Retirement Board election for two
contributing member seats. In addition, election information was in the October
newsletters and is posted on the STRS Ohio website. Individuals interested in running for a seat on
the State Teachers Retirement Board can request petitions from STRS Ohio. The
deadline for returning petitions is Feb. 28, 2014.
CEM
Pension Administration Survey Completed; Service Levels Increase, Costs
Unchanged
STRS Ohio
completed the annual CEM Pension Administration Benchmarking survey this month,
with results expected to be published next spring. CEM Benchmarking is a
leading global research company that measures the performance of public pension
plans and uses comparative analysis among peer groups, allowing STRS Ohio to
compare its results against about 70 public retirement systems around the
world. Based on reported data, STRS Ohio’s service level score is expected to
increase to 91 from last year’s score of 88. Service level scores increased for
pension inceptions, benefit estimates, Annual Statements and
satisfaction surveying. The administrative cost per member and annuitant has
steadily decreased since 2009; however, the costs stayed the same from 2012 to
2013.
STRS
Ohio Staff Teams Up on GASB Communication with Stakeholders
In September,
Finance staff gave the Retirement Board an update on new pension reporting
rules adopted by the Governmental Accounting Standards Board (GASB). Since that
time, staff has been working with the other Ohio retirement systems, as well as
system stakeholders, to coordinate common talking points and key messages to
help educate employers about the upcoming changes. Sponsoring employers will be
required to show a proportionate share of the net pension liability in their
financial statements beginning in 2015.
While these
rules are new, it’s important for the employers to realize that they are paying
these liabilities over time through their annual contributions of 14% of member
compensation. In addition to communication to employers, STRS Ohio is also
developing more detailed information to share with finance professionals. These
efforts will continue throughout the next year and into 2015 and beyond.