(The text below is reprinted from the news release by STRS)
Independent Report Shows STRS Ohio Has Lowest Investment Costs in Peer Group; Internal Investment Strategy Saves Millions of Dollars
At the December meeting of the State Teachers Retirement Board, CEM Benchmarking, a leading global research company, presented the results of its 2014 investment benchmarking study. This year’s report compared investment data for the five-year period ending Dec. 31, 2014, from 17 large U.S. public fund sponsors. Results of the study showed that STRS Ohio’s total investment costs were the lowest among the peer group, primarily due to STRS Ohio’s greater use of internal investment managers. The report stated that STRS Ohio saved about $103 million in 2014 by using internal investment managers for about three-quarters of the system’s assets. The savings is based on the peer group’s median external management costs.
The report also provided performance data and showed that STRS Ohio’s five-year total net return of 10.5% was in the top 25% of CEM’s U.S. public fund universe. The five-year return exceeds STRS Ohio’s assumed rate of return of 7.75%. CEM said STRS Ohio’s strong performance was due in part to its asset mix, which has a higher weighting in U.S. stocks and a lower weighting in fixed income than the peer group.
At the December meeting of the State Teachers Retirement Board, CEM Benchmarking, a leading global research company, presented the results of its 2014 investment benchmarking study. This year’s report compared investment data for the five-year period ending Dec. 31, 2014, from 17 large U.S. public fund sponsors. Results of the study showed that STRS Ohio’s total investment costs were the lowest among the peer group, primarily due to STRS Ohio’s greater use of internal investment managers. The report stated that STRS Ohio saved about $103 million in 2014 by using internal investment managers for about three-quarters of the system’s assets. The savings is based on the peer group’s median external management costs.
The report also provided performance data and showed that STRS Ohio’s five-year total net return of 10.5% was in the top 25% of CEM’s U.S. public fund universe. The five-year return exceeds STRS Ohio’s assumed rate of return of 7.75%. CEM said STRS Ohio’s strong performance was due in part to its asset mix, which has a higher weighting in U.S. stocks and a lower weighting in fixed income than the peer group.
CliftonLarsonAllen Completes 2015 Annual Financial Statement Audit
CliftonLarsonAllen reported the results of its audit of the STRS Ohio financial statements for the fiscal year ended June 30, 2015. 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 — also 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 2015 Comprehensive Annual Financial Report, which will be posted on the STRS Ohio website by Dec. 29, 2015. The report can also be requested by calling STRS Ohio’s Member Services Center toll-free at 1-888-227-7877. In addition to the financial statements, the report includes investment, actuarial and statistical information about STRS Ohio.
Retirements Approved
The Retirement Board approved 158 active members and 61 inactive members for service retirement benefits.
Other STRS Ohio News
Health care coverage tax form to be issued in January 2016
In compliance with the Affordable Care Act (ACA), STRS Ohio benefit recipients will begin receiving 1095-B forms next year for tax year 2015. The 1095-B form reports each month during the year that minimum essential health care coverage has been provided. All STRS Ohio plans provide minimal essential coverage, which protects members from having to pay a penalty tax for not having qualified health care coverage.
STRS Ohio will directly issue one 1095-B form to each benefit recipient who was enrolled in an STRS Ohio Medical Mutual self-insured plan during any month in 2015. STRS Ohio will mail 1095-B forms in mid-January.
STRS Ohio’s fully insured plans (Aetna, AultCare, HealthSpan and Paramount) are responsible for issuing 1095s for all non-Medicare benefit recipient enrollees. Medicare benefit recipients enrolled in these plans will receive 1095-B forms from the Centers for Medicare & Medicaid Services (CMS) or their plan administrators.
STRS Ohio recognized for funding, administration
STRS Ohio received the Public Pension Standards Award for Funding and Administration for 2015 from the Public Pension Coordinating Council (PPCC). The Council is a confederation of the National Association of State Retirement Administrators, the National Council on Public Employee Retirement Systems and the National Council on Teacher Retirement. The awards recognize public pension plans that meet key standards in several assessment areas, including actuarial, audit, investments, benefit programs and communications.
The next regularly scheduled board meetings are on Feb. 17, 18 & 19, 2016.
CliftonLarsonAllen reported the results of its audit of the STRS Ohio financial statements for the fiscal year ended June 30, 2015. 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 — also 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 2015 Comprehensive Annual Financial Report, which will be posted on the STRS Ohio website by Dec. 29, 2015. The report can also be requested by calling STRS Ohio’s Member Services Center toll-free at 1-888-227-7877. In addition to the financial statements, the report includes investment, actuarial and statistical information about STRS Ohio.
Retirements Approved
The Retirement Board approved 158 active members and 61 inactive members for service retirement benefits.
Other STRS Ohio News
Health care coverage tax form to be issued in January 2016
In compliance with the Affordable Care Act (ACA), STRS Ohio benefit recipients will begin receiving 1095-B forms next year for tax year 2015. The 1095-B form reports each month during the year that minimum essential health care coverage has been provided. All STRS Ohio plans provide minimal essential coverage, which protects members from having to pay a penalty tax for not having qualified health care coverage.
STRS Ohio will directly issue one 1095-B form to each benefit recipient who was enrolled in an STRS Ohio Medical Mutual self-insured plan during any month in 2015. STRS Ohio will mail 1095-B forms in mid-January.
STRS Ohio’s fully insured plans (Aetna, AultCare, HealthSpan and Paramount) are responsible for issuing 1095s for all non-Medicare benefit recipient enrollees. Medicare benefit recipients enrolled in these plans will receive 1095-B forms from the Centers for Medicare & Medicaid Services (CMS) or their plan administrators.
STRS Ohio recognized for funding, administration
STRS Ohio received the Public Pension Standards Award for Funding and Administration for 2015 from the Public Pension Coordinating Council (PPCC). The Council is a confederation of the National Association of State Retirement Administrators, the National Council on Public Employee Retirement Systems and the National Council on Teacher Retirement. The awards recognize public pension plans that meet key standards in several assessment areas, including actuarial, audit, investments, benefit programs and communications.
The next regularly scheduled board meetings are on Feb. 17, 18 & 19, 2016.