Aug. 15, 2003

Retirement Board Adopts Committee Recommendations
During its Aug. 15, 2003, meeting, the State Teachers Retirement Board adopted the following committee recommendations:

Continuation of a Hiring Freeze.
It is expected that additional staff attrition will reduce the number of STRS Ohio associates to 675 by June 30, 2004, from its current level of 688.

Continued Suspension of the Performance Compensation Program for Non-Investment Associates for the 2003-2004 Fiscal Year.
This will result in a $2 million savings in the 2004-2005 fiscal year budget.

A Performance Compensation Program for Investment Associates Following Review and Necessary Modifications by the Board’s Investment Committee.
This will ensure that the system will continue to realize the tremendous savings incurred by using internal staff to manage the majority of assets rather than paying high fees to external money managers. For example, STRS Ohio saved $54 million in calendar year 2001 and $79 million in calendar year 2002 through internal management of assets.

Request That the Ohio Retirement Study Council Include a Review of all Components of the System’s Compensation and Benefits Program in its Independent Fiduciary Performance Audit.
The results of this review will help the Retirement Board and management determine the appropriate compensation position for this system in relation to its peers.

The Definitions for Liquid Assets and Low-Income Earnings Threshold for the Health Care Premium Assistance Program.
Staff will be sending personal letters to the 1,150 service retirement or disability benefit recipients who may be eligible for the new program, which offers a 30% reduction in the premium amount a benefit recipient pays each month for his or her coverage.

Replacement of the Coinsurance Payment Schedule for the AdvancePCS Prescription Drug Program with a Three-Tier Flat Copayment Plan.
Under this copayment structure, tier one is generic drugs, tier two is select brand-name drugs and tier three is all other brand-name drugs.

Revised Budgets for the 2003-2004 Fiscal Year Adopted by Board
The revised operating budget reflects an additional $6.5 million in cuts, while the capital budget has been reduced by an additional $998,000. The budget for expenditures to the State of Ohio was increased by $500,000. This represents an expected payment to the Ohio Retirement Study Council for the independent fiduciary performance audit.

New Guidelines to Limit Board Travel Adopted
These will go into effect immediately. Included in the guidelines is an annual travel limit of $6,000 per board member, excluding conference registration/tuition fees, due diligence related to investment policy and assets, and travel within Ohio for official STRS Ohio business. The guidelines also establish a maximum of three trips per year per board member and a maximum of three board members per conference, both also excluding due diligence travel.

Succession Plan Approved for Replacing Executive Director
The board approved a motion giving authority to the Retirement Board chair to appoint an ad hoc committee to oversee the process for selecting an executive director. The committee will be appointed by Dec. 12, 2003; the anticipated employment date of the new executive director is July 1, 2004.

Nominees for Active Teacher Seat Announced
Four individuals were nominated for the active teacher seat now open on the Retirement Board due to the resignation of Hazel Sidaway. The nominees are Robert B. Brown, MaryAnn R. Fredrick, John Lazares and Constance Ramser. The board will vote on the nominees at its September meeting.

Retirement, Investment Transactions Approved
The Retirement Board approved the following retirements and investment transactions:

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