Feb. 20, 2004

Retirement Board Names Executive Director
The State Teachers Retirement Board voted to name Dr. Damon F. Asbury as the executive director of the State Teachers Retirement System of Ohio (STRS Ohio) during a special meeting on Feb. 18. Asbury has been serving as the system’s interim executive director since Aug. 5, 2003.

“Damon is only the eighth director in the history of this organization. This is not a decision we made hastily,” said Eugene E. Norris, chair of the Retirement Board, at the February meeting. “During our reviews of Damon’s performance during the past seven months, it became clear to all the board members that Damon already met the criteria we would be looking for in a new leader. In our discussions with members, we learned that many were also seeking the same qualities in an executive director.

“His experience as an educator and his openness to listening to our members are some of the traits this board believes are imperative for an executive director. He also has built strong relationships with the board and staff that will allow this system to continue its progress uninterrupted. Through his significant leadership, he has demonstrated that he shares our vision for the long-term stability of this system. Damon has shown that he believes in this system, believes in its mission and believes that the public educators of this state deserve a safe and secure future.”

Asbury began his career at STRS Ohio in July 2000 when he was designated deputy executive director — Administration. He officially took over the position in January 2001. Prior to coming to STRS Ohio, he served as the superintendent of the Worthington City Schools from 1991–2000. He was with the Columbus City Schools from 1967–1991.

In accepting the board’s appointment, Asbury said, “For more than 80 years, STRS Ohio has been serving the public educators of this state. To be named the director is an honor that I had not anticipated, but one that I welcome.

“When I was named interim, I pledged to take this system in a new direction. Because of the leadership exhibited by this board and the support of our outstanding associates, we have been able to strengthen policies, improve system operations and undertake initiatives that follow sound business principles. I have no doubt that this will continue.”

Since his appointment in August, the Retirement Board and Asbury have reduced operating expenditures, revised the Performance-based Incentive Program for Investment associates and adopted new policies regarding travel, business expenses and financial disclosure. Asbury has also traveled around the state, meeting with groups of active and retired teachers.

“We must pay attention to the day-to-day operations of this system,” Asbury said. “But it is equally important to focus attention on the ‘big picture’ issues, such as affordable health care coverage for retired teachers and the ability to invest our funds in the best interests of our members.

“Whatever steps we take in the future, it is important that we maintain the confidence of our membership, the Ohio Retirement Study Council, the Legislature and the general public,” Asbury emphasized. “The ‘whys’ behind our decisions and our positions are just as important to communicate as the actions themselves.”

Asbury received a three-year contract from the Retirement Board, covering the period Feb. 18, 2004–Feb. 1, 2007. Asbury does not plan on filling the position he held previously.

New Public Participation Guidelines Approved for a Trial in April and May
Traditionally, STRS Ohio members have had an opportunity to address the Retirement Board during the first part of the board’s regular meeting each month, which begins at 10 a.m. However, this resulted in some members who live a long distance from Columbus having to arrive the night before or travel very early in the morning to speak at a meeting. By only attending the Friday meeting, members were also not hearing the detailed presentations or the ensuing discussion among the board members during the board’s committee meetings, which are held on Thursday prior to the Friday board meeting.

To address these issues, the Retirement Board will convene its regular monthly meeting at 3 p.m. on the Thursday of its committee meetings and invite public comment at that time. Individuals wishing to address the board can personally sign up at any time during that day. Three minutes will continue to be the amount of time allocated to each speaker, up to a maximum of 20 speakers.

This change will also give the members of the Retirement Board time to more carefully mull over comments and suggestions before deciding at the board meeting whether to accept committee recommendations. As in the past, all board and committee meetings remain open to the public.

These changes will be shared with STRS Ohio members through the March newsletter and the STRS Ohio Web site.

Health Care Program Changes Have Helped Stabilize Funding
In a special meeting of the Retirement Board’s Health Care Committee with the Health Care Advocates of STRS on Feb. 18, Hewitt Associates presented a review of the STRS Ohio Health Care Program. Hewitt Associates noted that the changes STRS Ohio made last year in plan design were leading edge and have helped the health care funding situation for the system. Further, they have enabled the Retirement Board to have the opportunity to look at other options for long-term funding. Hewitt’s comments were confirmed in a report the Retirement Board received from its actuary, Mellon Consultants, on Feb. 19. Mellon reported that not only has the Retirement Board’s goal of maintaining a 10-year balance going forward been accomplished, but the fund has also been extended by an additional year to 2015. Last year, the fund was solvent until just 2008.

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

Additional Items Reported at the Meeting

Milliman USA Report Shows Improved Funding for Pensions
Earlier this month, Milliman USA presented an update to the actuarial report it presented about STRS Ohio and two other systems last November to the Ohio Retirement Study Council, plus reports for OPERS and the Highway Patrol Retirement System. This presentation was followed by a letter from Milliman USA to the ORSC, further clarifying its findings. Perhaps one of the most important statements to come out of these studies was contained in that letter. Milliman USA noted, “Our reports confirmed that all of the retirement systems remain financially secure to pay all mandated pension benefits when they become due well into the future.”

In March, ORSC will receive a report from STRS Ohio that reiterates the system’s stance that pension plan design should not be linked to short-term fluctuations in the market, but considered in the context of long-term policy horizons. Further, it emphasizes that the Retirement Board realizes that a guaranteed pension benefit without some package of affordable health care benefits is not truly a secure retirement package for present or future retirees. Any changes must address both issues.

In other news from the ORSC, the request for proposals for the independent fiduciary performance audit of STRS Ohio has been reissued. The project timeline calls for the project to be awarded in May and the final report submitted to the ORSC in December.

Ohio House and Senate at Odds Over Pension Reform
The Ohio House and Senate are still at odds over a compromise on pension reform. The expanded authority for the State Treasurer appears to be off the table. However, the composition of the five retirement boards and the House provisions on investment mandates are still being debated. Nothing is expected to happen on these bills until after the March 2 primary. STRS Ohio members are encouraged to continue to let their legislators know their positions on the key provisions of these bills.

Return to listing of past issues of Board News.