Sept. 17, 2004

Board Officers Elected
Joe Endry was elected chair and Deborah Scott was elected vice chair of the State Teachers Retirement Board during its Sept. 17 meeting. They will serve one-year terms as officers. Endry has served on the board since 2001, while Scott joined the board in 1994.

Two Additional Disease Management Programs Added to STRS Ohio Health Care Program
At its Sept. 17 meeting, the Retirement Board approved the addition of two disease management programs to the STRS Ohio Health Care Program. As previously demonstrated through the system’s involvement in the LifeMasters program, disease management is an effective tool for improving STRS Ohio members’ health and reducing health care costs for both the member and the STRS Ohio Health Care Stabilization Fund.

STRS Ohio will enter into three-year contracts with Renaissance for disease management of end-stage renal disease and Accordant for disease management of rare conditions. The programs will be offered to eligible members on a voluntary basis. Both vendors predict that their program will generate savings that are equivalent to the fees paid by STRS Ohio. If the savings do not at least equal the fees paid, each vendor has agreed to refund STRS Ohio part or all of its fees. The programs will begin in January 2005.

Active Investment Management Beneficial to the Pension Fund
During the Retirement Board’s Investment Committee meeting on Sept. 16, John Osborn of Frank Russell Company, who serves as the board’s investment consultant, provided a review of the pension fund’s performance during the past one-, three- and five-year periods. During the presentation, it was noted that the system’s total fund has benefited from being actively managed during all these periods through greater returns than if passively managed.

Web Site’s New Look and Enhanced Content Shared With Board
During the meeting of the Committee on Board Orientation and Development, Retirement Board members received a preview of the new content and design features that have been added to the STRS Ohio Web site. The new site, which will be launched on Oct. 1, 2004, includes easier access to personal account information, online forms, benefit calculators and counseling and seminar schedules. Expanded information sections will also keep site visitors informed about STRS Ohio events and Retirement Board meetings. The site address remains www.strsoh.org.

During this committee meeting, Chair Joe Endry announced that Michael Billirakis will serve as a mentor to John Lazares, and Dr. Robert Brown will serve as a mentor to Conni Ramser, as part of the board’s New Member Orientation Program.

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

• 20 disability retirements were granted.
• 738 active members were approved for service retirements; 92 inactive retirements were approved.
• In August, fixed-income purchases totaled $278 million, domestic equity purchases totaled $950 million, and real estate purchases totaled $4.4 million.

Additional Items Reported at the Meeting

Rogue States Issue Reaches Into Ohio
Late in August, four of the five public retirement systems in Ohio received a letter from New Jersey Sen. Frank Lautenberg in which he expressed concerns about holdings the systems may have in companies currently doing business in countries that have been designated by the U.S. State Department as terrorist-sponsoring states. Sen. Lautenberg’s letter comes on the heels of the release of a report by the Center for Security Policy entitled “The Terrorism Investments of the 50 States.” The four systems that received the letter (the Highway Patrol Retirement System did not) replied to Sen. Lautenberg that the systems do not knowingly invest in companies that support terrorism and that it is difficult, if not impossible, for systems to determine if a company is contributing to terrorism. Further, the systems stated that they rely on the federal offices of the Secretary of State and the Secretary of Defense to identify companies that illegally conduct business within terrorist-sponsoring states. Since the issuance of the Center’s report and Sen. Lautenberg’s letter, the Center has started a campaign among state treasurers. The Center is urging them to “take a leadership position” by introducing legislation similar to a bill passed recently in Arizona that requires state public pension systems to report to the legislature “portfolio companies that do business with terrorist-sponsoring states.” And it just so happens that for $12,000 a year, pension systems can access a service provided by Conflict Securities Advisory Group, whose chief executive is on the board of directors of the Center for Security Policy, that will identify companies doing business with terrorist-sponsoring states.

Meanwhile, several national organizations including the National Council on Teacher Retirement (NCTR), of which STRS Ohio is a member, joined together in sending a letter to SEC Chair William Donaldson requesting a meeting to discuss how the SEC’s new Office of Global Security can assist institutional investors.

Health Care Assistance Program Enrollees Now Total 80
As of the end of August, a total of 87 applications have been received for the Health Care Assistance Program. Of those, 66 have been approved, increasing the number of enrollees in the program to 80. A total of 13 applicants have been denied because financial requirements were not met. About two-thirds of the approved applicants are disability retirees.

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