STRS Ohio News for Benefit Recipients
October 2009

Print a copy of the August newsletter.

Print a copy of the October newsletter.

• Retirement Board Adopts Plan for Pension Design and Contribution Changes
• Open Enrollment for Health Care Plans Begins Nov. 1
• Value of Defined Benefit Plans Confirmed in NIRS Report
• STRS Ohio Health Care Program News
• Fight the Flu “Bugs” With a Double Shot of Protection
• Watch Your Mail for New Online Password Instructions
• Investments and Financial News Update
• 2009 Retiree Series Ends Soon; Next Series Starts in January 2010
• 'Banking Days' Highlighted
• Tax Information Will Arrive in Mid-January 2010

Retirement Board Adopts Plan for Pension Design and Contribution Changes
Following many months of discussion and after receiving significant input from STRS Ohio members, the State Teachers Retirement Board unanimously approved a multifaceted plan on Sept. 1, 2009, to strengthen the financial condition of the retirement system. In approving the plan, board members cited the difficulty in making the decision, noting that these changes impact all STRS Ohio members and employers. The plan includes an increase in contributions; an increase in final average salary years; a change in eligibility for retirement; a change in the benefit formula; and a reduction in the annual cost-of-living adjustment.

Before the market downturn, STRS Ohio had a funding period of 41.2 years, exceeding state statute’s 30-year maximum funding period. Factors, such as members living longer, caused a reduction in available funds to pay off accrued liabilities over time. The unprecedented decline in the global markets and the accompanying recession, along with the projected gradual economic recovery, significantly accelerated the need for STRS Ohio to make pension benefit changes. Without these changes, STRS Ohio would eventually be unable to pay future benefits. This plan enables the Retirement Board and staff to meet their fiduciary responsibility to help ensure the long-term solvency of STRS Ohio for future generations of teachers.

STRS Ohio staff projects that these changes would save almost $9 billion in accrued liabilities and would bring the pension fund to a 33.4-year funding period from its current status of infinity, assuming the proposed timeline for the changes can be implemented. Further, the current 1% employer contribution to the health care fund continues under the proposed changes.

Increase in Contributions
— Increase member contributions by 0.5% per year beginning July 1, 2011, to a total of 2.5% on July 1, 2015.
— Increase employer contributions by 0.5% per year beginning July 1, 2016, to a total of 2.5% on July 1, 2020.

Currently, STRS Ohio members pay 10% of their salary to STRS Ohio and employers pay 14% of total teacher payroll in lieu of paying into Social Security. This plan component increases member and employer contributions by a total of 5% by July 1, 2020. The member increase would be phased in at 0.5% per year, beginning July 1, 2011, until 2.5% is reached on July 1, 2015. The employer increase would be delayed for five years, when it would be phased in at 0.5% per year, beginning July 1, 2016, until 2.5% is reached on July 1, 2020. Ultimately, STRS Ohio members would contribute 12.5% and employers would contribute 16.5%. This phased approach allows time for the economy to improve and also helps employers with budgeting.

Increase in Final Average Salary (FAS) Years
— FAS calculation to be based on five highest years of earnings, beginning Aug. 1, 2015.

Pension benefits are determined by a member’s age, years of service and FAS. Under the recommended plan, the FAS would be based on the five highest years of earnings versus the current three years, beginning Aug. 1, 2015.

Change in Eligibility for Retirement
— Increase years of service required for retirement, beginning Aug. 1, 2015.

The recommended change increases the number of years required to be eligible for retirement. Beginning Aug. 1, 2015, members can retire at any age with 35 years of service; at age 60 with 30 years of service; or at age 65 with five years of service. (Members may retire earlier with an actuarially reduced benefit at age 55 with 30 years or at age 60 with five years.) Members who meet age and service eligibility for service retirement as of July 1, 2015, will retain their eligibility under the existing rule.

Change in Benefit Formula
— New formula would be 2.2% per year for the first 30 years of service; 2.5% per year thereafter, beginning Aug. 1, 2015.

The 35-year enhanced benefit is no longer needed to encourage teachers to work longer and is eliminated. Those who have 30 years of service; who are age 55 with 25 years of service; or who are age 60 with five years of service as of July 1, 2015, receive the greater of:

(a) The benefit as of July 1, 2015, under the current formula; or

(b) The benefit upon retirement under the new formula.

In short, members who are eligible for service retirement will receive no less of a base pension benefit than they could have received on July 1, 2015. Under the new formula, at the end of a 35-year career, teachers would receive 78.5% of their final average salary; teachers who retire at age 60 with 38 years would receive 86% of final average salary.

Reduction in Cost-of-Living Adjustment (COLA)
— Beginning July 1, 2011, current retirees would receive an annual 2% COLA; members retiring after July 1, 2011, would receive a 1.5% COLA each year.

Currently, the COLA is 3%. Without a change in the COLA, a viable Defined Benefit Plan cannot be sustained.

Next Steps
In addition to STRS Ohio, the other four Ohio public pension plans have been impacted by low investment returns, demographic factors and the economic outlook. As a result, the Ohio Retirement Study Council (ORSC), which is the legislative oversight body for the five systems, directed each system to present a board-approved plan at the ORSC’s Sept. 9, 2009, meeting for either maintaining or returning to a 30-year funding period.

There was wide divergence among the plans that were presented due to the variations in each system’s funding situation, demographics and plan design. In the coming weeks, ORSC staff will work with the systems and discussions will continue at the monthly ORSC meetings. It is anticipated that eventually legislation will be drafted and introduced and then the normal legislative process will begin. All of the changes contained in STRS Ohio’s proposed plan require legislative action by the Ohio General Assembly and the governor, as all the plan components require changes in existing statutes.

Looking to the Future
The Retirement Board will continue to annually review the actuarial valuations of the pension fund and the health care fund to monitor both funds’ progress over time. The board will also continue working with its many constituents — including the Healthcare and Pension Advocates (HPA) for STRS — as discussions continue with the other Ohio systems, the ORSC and other members of the Legislature.

The STRS Ohio plan:

• Preserves the Defined Benefit Plan for Ohio’s public educators. STRS Ohio members do not have to worry about outliving their benefits. These pension benefits can continue to support local economies (more than $3.6 billion in benefits are paid to Ohio residents alone); the taxes paid on these benefits can also continue to support local, state and federal governments. A viable Defined Benefit Plan also reduces the likelihood that STRS Ohio members will have to turn to public assistance, Medicaid or social services in retirement, thus relieving taxpayers of future obligations.

• Continues to offer a retirement plan that will help Ohio’s public schools, colleges and universities recruit and retain quality educators.

• Allows for current and future active members, retirees and employers to collectively contribute to a solution.

• Provides a transition period for those teachers who are close to retirement, while recognizing that those further from retirement have more time to plan for their future financial security.

• Allows members to continue to control their retirement decisions and not be “forced” out. This mitigates a potential “stampede” of members who want to retire before changes go into effect, thus preserving retirement patterns for STRS Ohio and protecting employers from veteran teachers leaving all at once.

• Preserves all past cost-of-living adjustments (COLAs) and ad hoc increases for current retirees.

• Allows retirees’ pensions to continue to grow in the future, but at a slower rate.

Most importantly, the Retirement Board and staff, as fiduciaries of the system, have developed a plan that helps ensure the long-term solvency of STRS Ohio for future generations of teachers.

“At STRS Ohio, we know there are no easy solutions to the challenges we face — and we know some decisions will not make all members happy,” said Michael Nehf, executive director. “We pledge to continue to use our newsletters, Web site, e-mail news service and face-to-face meetings to do what we can to make sure members know the progress of the legislation and any changes going forward.”

Open Enrollment for Health Care Plans Begins Nov. 1
STRS Ohio’s annual open-enrollment period for health care plans begins on Nov. 1 and extends through Nov. 24. As noted in previous STRS Ohio newsletters, there are a number of changes for calendar year 2010 that STRS Ohio members should be aware of as they evaluate their plan options. These changes are designed to help members stretch their health care dollars, as well as extend the life of the health care fund that supports the STRS Ohio Health Care Program. Here is an overview of the most significant changes:

Aetna Basic and Plus Plans No Longer Available
Beginning Jan. 1, 2010, Aetna will no longer be used as an administrator for non-Medicare plans. Both the Basic and Plus Plans will be administered by Medical Mutual. All Aetna Plus and Basic Plan enrollees will be moved to the corresponding Medical Mutual plan. (See the story below.)

Aetna Medicare Plan (PPO) Added to the Program
For 2010, STRS Ohio will offer the Aetna Medicare Plan (PPO), a Medicare Advantage plan that has enhanced coverage compared to the Basic and Plus Plans, as well as lower premiums than the Plus Plan. This new plan is available to enrollees with Medicare Parts A & B living in the United States and enrollees with family accounts in which each family member is enrolled in Medicare Parts A & B. Benefit recipients who are eligible for the Aetna Medicare Plan (PPO) and are currently enrolled in a Basic or Plus Plan will be automatically enrolled in the Aetna Medicare Plan (PPO) for 2010, pending approval from Medicare. Individuals enrolled in this plan will continue to pay their Medicare Part B premium, just as they have in the past for other STRS Ohio plans.

Individuals who prefer not to be enrolled in the Aetna Medicare Plan (PPO) can “opt out” of the plan during open enrollment and choose the Medical Mutual Basic Plan or one of the local options if available (AultCare — Canton area, Kaiser Permanente — Cleveland area or Paramount — Toledo area). The Medical Mutual Plus Plan will no longer be available to enrollees who are eligible for the Aetna Medicare Plan (PPO).

Individuals with Medicare Parts A & B who are currently enrolled in an AultCare, Kaiser Permanente or Paramount plan will not be moved to the Aetna Medicare Plan (PPO). However, you are encouraged to compare your plan’s coverage and premiums for 2010 with the Aetna Medicare Plan (PPO), using the 2010 Plan Overview Chart that will be included in your open-enrollment mailing.

Express Scripts Prescription Drug Coverage Continues
In 2010, Express Scripts will provide a single prescription drug plan for the Medical Mutual Basic and Plus Plans, Paramount health care plans and the new Aetna Medicare Plan (PPO). Detailed information about the changes for 2010 are included in the health care open-enrollment packets.

Additional Information Is Available
If you are currently enrolled in an STRS Ohio-sponsored health care plan, you will receive a packet of personalized materials during the last week of October that outlines your 2010 plan options, monthly premiums and coverage features. The plan listed as “Option 1” on Your 2010 STRS Ohio Health Care Plan Options sheet included in that packet is the plan you will be enrolled in for 2010. If you want to remain enrolled in that plan, you do not need to contact STRS Ohio. However, if you want to select a different plan for 2010, you will need to call STRS Ohio by Nov. 24, 2009. Just call us toll-free at 1-888-227-7877. Member service representatives are available Monday through Friday, from 8 a.m. to 5 p.m. (Online plan selection is not available this year.)

If you are not currently enrolled in the STRS Ohio Health Care Program but would like information about your options for 2010, contact STRS Ohio as early as possible before the Nov. 24, 2009, open-enrollment deadline. Personalized health care plan materials based on your Medicare status and permanent residence can be mailed to your home, beginning Nov. 1. Please ask for materials as early as possible before the enrollment deadline to allow ample time to review your plan options. For more information and to receive personalized health care plan materials, call STRS Ohio toll-free at 1-888-227-7877 or e-mail ContactUs@strsoh.org. Plan information and premiums are also posted on the STRS Ohio Web site.

No open-enrollment health care plan changes will be accepted after Tuesday, Nov. 24, 2009.

Frequently asked questions and answers about the STRS Ohio Health Care Program can be found on the STRS Ohio Web site.

Value of Defined Benefit Plans Confirmed in NIRS Report
Last fall, STRS Ohio shared information with its members about the formation of the National Institute on Retirement Security (NIRS). This organization, which STRS Ohio joined as a charter member, is using research and education programs to show how defined benefit plans enhance retirement security for their participants.

The most recent report issued by NIRS in July 2009 shows that defined benefit pension income plays a critical role in reducing the risk of poverty and hardship among older Americans. The report, titled “The Pension Factor: Assessing the Role of Defined Benefit Plans in Reducing Elder Hardships,” notes that pension income resulted in a savings of $7.3 billion in public assistance expenditures and 4.7 million fewer households in poverty or near poverty in 2006 in the United States. More than 23 million older Americans received a defined benefit pension that year. A second report by NIRS shows that 87% of all American workers believe they should have a pension so they can be self-reliant in retirement.

The value of the defined benefit plan is well understood by the State Teachers Retirement Board; preserving STRS Ohio’s Defined Benefit Plan for future generations of Ohio educators is the driving force behind the board’s proposed long-range plan (see accompanying article). About 441,000 of STRS Ohio’s members are currently enrolled in or receiving benefits from the system’s Defined Benefit Plan. However, as discussions about changes to Ohio’s public pension plans begin at the Statehouse, there may be calls for Ohio’s public employees to move to defined contribution plans controlled by outside vendors. All five systems will continue to monitor these discussions and share information with their respective members.

STRS Ohio Health Care Program News

Important Items to Remember During Open Enrollment
Contact Medical Mutual for Assistance in Finding Providers
Over the years, the number of non-Medicare enrollees in the Aetna Plus and Basic Plans has declined significantly. As a result, Aetna will no longer be used as an administrator for these two plans in 2010. For those who are still participating in one of these plans in 2009, Medical Mutual will be your non-Medicare administrator option in 2010. Over the next several months, you will receive additional information from Medical Mutual about the services it offers and the providers available in its network, as well as new ID cards.

Medical Mutual offers a broad network of providers. If you cannot locate your provider in its network, Medical Mutual will assist you in locating in-network doctors and hospitals for your coverage in 2010. To help transition STRS Ohio enrollees, Medical Mutual will do the following:

• Assist enrollees in locating in-network providers through its customer service center;

• Work with local providers to provide outreach services to ease concerns and facilitate access to in-network providers;

• Provide an outreach plan for enrollees in active treatment with out-of-network providers; and

• Allow waivers (coverage at in-network levels) for out-of-network use for enrollees in active treatment with an out-of-network provider for specified periods of time, typically 90 days or less.

Coverage Eligibility Limited to One Account
If you’re eligible for health care coverage under more than one STRS Ohio account (e.g., as both a benefit recipient and a spouse of a benefit recipient), it’s your responsibility to contact STRS Ohio to determine which account will provide the most economical monthly premium. You may not be enrolled under two STRS Ohio health care accounts. Additionally, if you’re eligible for health care coverage through more than one Ohio public retirement system, there are guidelines that determine which system is responsible for your coverage. Contact STRS Ohio for details.

Need to Enroll a Spouse or Dependent?
To enroll an eligible spouse, dependent child or sponsored dependent who is not currently enrolled in your health care plan, visit the STRS Ohio Web site to print an enrollment application or call STRS Ohio to request an application. Please allow enough time to ensure that STRS Ohio receives and processes your application by Nov. 24, 2009.

Seats Are Filling Quickly for the Fall Health Care Meetings
Many STRS Ohio members have already registered for this fall’s Health Care Program Highlights Meeting that is being offered around the state. This popular program is designed to help members with their health care plan decisions. Meetings are held three times per day; each meeting is 90 minutes in length. The 10 a.m. and 2 p.m. meetings are for Medicare Parts A & B enrollees. The 5 p.m. meeting is for enrollees who are under age 65 without Medicare; Medicare Part A-only enrollees; Medicare Part B-only enrollees; and families that include both Medicare and non-Medicare enrollees. Advance registration is required. To register, call STRS Ohio toll-free at 1-888-227-7877 or register online, where directions are also posted.

At the time of this newsletter’s mailing, seats were still available for the following meetings:

*This meeting date only has the 10 a.m. and 2 p.m. meetings for Medicare Parts A and B enrollees.

Contact Plan Administrators With Specific Questions, Including Current Provider Lists
During open enrollment, you may need to contact the health care plans directly to get more information, ask specific coverage questions or obtain a provider directory. Toll-free numbers and Web addresses for all the health care plans are included in the open-enrollment materials, as well as included in the chart below. Please note that if you’re enrolled in the Medical Mutual PPO plan, the name of the participating provider network varies depending on the geographic location of your permanent residence. For assistance locating the correct name of the provider network, contact Medical Mutual.

Important Items to Remember After Open Enrollment
New enrollees in the Medical Mutual health care plans will receive their hospital/medical plan ID cards in December for use beginning Jan. 1, 2010. Enrollees who are continuing their coverage in these plans should continue to use their current card. In addition, all enrollees in the Aetna Medicare Plan (PPO) will receive hospital/medical plan ID cards. If you need to obtain services in 2010 before your new card arrives, you can present the “Welcome Aboard” letter that you will receive from Aetna to your health care provider as documentation of your enrollment in the plan. Finally, new enrollees in the Express Scripts prescription drug program will receive new ID cards in December for use beginning Jan. 1, 2010, as well as a preferred list of medications. Current enrollees will receive new ID cards by mid-January. You can continue to use your current ID card until the new card arrives in the mail, along with a preferred list of medications.

STRS Ohio Health Care Program enrollees who have new plans for 2010 will receive additional information in their open-enrollment packets. Watch for an enclosure titled “What to Expect After Open Enrollment.”

Important Items to Remember Year-Round
New Medicare Enrollees Need to Notify STRS Ohio
When you or a covered family member sign up for Medicare, it’s important to notify STRS Ohio. Why? Because the month you become eligible for Medicare coverage, your medical claims will be processed as if you’re enrolled in Medicare. STRS Ohio needs proof of your Medicare status to ensure your claims are processed properly. Notifying STRS Ohio of your Medicare status is simple. Just send us a copy of your Medicare card.

Failure to notify STRS Ohio could result in an automatic plan change or higher monthly premiums. Beginning Jan. 1, 2010, Medical Mutual Plus Plan enrollees who fail to confirm their Medicare status will be enrolled in the Basic Plan until STRS Ohio receives confirmation. AultCare, Kaiser Permanente and Paramount plan enrollees will be charged a higher monthly premium until Medicare status is confirmed.

As a reminder, all health care program participants must enroll in Medicare when they turn age 65. For information about STRS Ohio health care and Medicare, call STRS Ohio toll-free at 1-888-227-7877.

Health Care Assistance Program Available to Help With Health Care Costs
The Health Care Assistance Program provides qualifying benefit recipients with medical and prescription drug coverage for no monthly premium. The program is currently available to: (1) service retirement benefit recipients with 25 or more years of Ohio-valued service; (2) disability benefit recipients currently receiving STRS Ohio benefits; (3) beneficiaries of retired teachers with at least 25 years of Ohio-valued service at retirement; (4) survivor benefit recipients of active or disabled teachers eligible to retire with at least 25 years of Ohio-valued service at retirement; or (5) survivor benefit recipients of active or disabled teachers not eligible for service retirement. Eligibility for the program is based on an annual family income limit of $23,800 and a household liquid asset limit of $23,800. (A home is not considered a liquid asset.)

If you believe you qualify, please call STRS Ohio toll-free at 1-888-227-7877 to request an application. You do not have to be a current enrollee in the STRS Ohio Health Care Program to apply.

Fight the Flu “Bugs” With a Double Shot of Protection
As widely reported in the media, experts predict a very busy flu season with the “seasonal” influenza (flu) being joined this year by the H1N1 virus (also known as swine flu). Both forms of flu are very contagious. However, the Food and Drug Administration announced in September that a vaccine to fight the H1N1 virus will now be available in addition to the vaccine for seasonal flu. Each vaccine requires a separate shot.

All STRS Ohio-sponsored health care plans provide varying coverage for inoculations after applicable deductibles and coinsurance have been paid. To learn about your health plan’s specific level of coverage, enrollees are encouraged to call their plan directly using the toll-free phone number on the back of their ID card.

Read on to learn more about this year’s “double whammy” flu season.

Seasonal Flu
The “ordinary” seasonal flu is still a concern and should not be taken lightly, although the H1N1 virus has received more media attention. A regular shot can protect you and your family from the misery of body aches, fever and cough that come with seasonal flu, which can also make existing conditions worse. The flu can occur anytime from November through May, but most often peaks in January or February.

Experts say it can take up to two weeks for protection to develop after the shot. Protection lasts up to a year. Health care providers began giving regular flu shots in September in hopes of preventing hospitalizations that on average include more than 200,000 people in the United States. The flu is serious business when you consider that 36,000 Americans died from it last year alone.

H1N1 Virus
The H1N1 virus is a new influenza virus that began causing illness in people in the United States last April. The H1N1 virus is thought to infect individuals in the same way that seasonal flu spreads. Flu viruses are spread mainly from person to person through coughing or sneezing by people with influenza, and sometimes by touching something with flu viruses on it and then touching one’s mouth or nose. A new vaccine against the H1N1 virus is in production and should be available in October.

Next Steps

Learn more.

Contact your family doctor, who can help you determine what vaccinations are appropriate for you and your family members. You can also contact your local or state health department. The Centers for Disease Control and Prevention (CDC) also has an extensive amount of information on its Web site at www.cdc.gov/flu.

Take precautions to protect your health.

• Cover your nose and mouth with a tissue when you sneeze and dispose it in the trash.

• Wash your hands often with soap and water, or an alcohol-based cleanser.

• Avoid touching your eyes, nose or mouth. Germs spread this way.

• Avoid contact with sick people.

• Cough into your elbow or a tissue.

• Use a germ-killing disinfectant to clean household surfaces.

• Stay home from school or work if you become infected with the flu. The CDC recommends that you stay home for at least 24 hours after your fever is gone.

Watch for these warning signs; if they occur, seek emergency care.

• Difficulty breathing or shortness of breath.

• Pain or pressure in the chest or abdomen.

• Sudden dizziness.

• Confusion.

• Severe or persistent vomiting.

• Flu-like symptoms improve, then return with fever and worse cough.
  

Watch Your Mail for New Online Password Instructions
The installation of STRS Ohio’s new pension management computer software is scheduled to be completed in December. Most of the system’s new features will be “behind the scenes” and will not affect members’ use of the STRS Ohio Web site. However, members who are using a password to access the Personal Account Information section of the site will need to acquire a new password. Also, to improve identity protection for our members, we will no longer use your Social Security number as your user name. Instead, members will create a user name when they log in to the updated site for the first time. All current password holders should watch their November mail for instructions on how to select a new user name and request a new password.

Investments and Financial News Update
Retirement Board Defers Payment of Reduced PBI Payments
The Performance-Based Incentive (PBI) Program enables eligible STRS Ohio investment associates to receive an additional percentage of their base salary through a PBI payment. This payment is calculated on the performance of various portfolios and asset classes against their respective benchmarks for multiple-year periods, as well as total fund performance and absolute return. STRS Ohio associates internally manage about 80% of the system’s investment assets — versus using outside money managers. Third-party studies have shown that this practice is extremely cost-effective for STRS Ohio, saving about $112 million in fees in calendar year 2008 alone. A compensation structure that includes both fixed and variable pay (pay that is “at risk”) is a commonly accepted practice in both the public and private investment sectors; STRS Ohio has had some form of incentive compensation in place since the mid–1980s.

However, the Retirement Board has made adjustments to the PBI Program throughout this past fiscal year due to the unprecedented downturn in the investment markets and after considering input from some STRS Ohio members.

Earlier this year, the Retirement Board voted to suspend the PBI Program for fiscal year 2009 as of Feb. 1, 2009. With that suspension, it was noted that any earned PBIs for that fiscal year would be limited to 7/12 of the performance results for July 1, 2008–Jan. 31, 2009. Existing program criteria also called for a 20% reduction in any earned PBIs if the total STRS Ohio investment fund did not earn a positive absolute return.

While the value of STRS Ohio’s investment fund has dropped significantly during the recession, the net value added from active management over the total fund benchmark return for the time period of July 1, 2004, through June 30, 2009, was more than $1 billion. This means that investment assets were $1 billion higher at June 30, 2009, than if STRS Ohio had invested only in index funds. This number takes into account all direct investment costs, including earned PBIs, during that period. The benchmark annualized rate of return over the five-year period was 2.30%; the return on STRS Ohio’s total investment fund was 2.69%.

At its September meeting, the board voted to not pay the resulting $3.39 million in PBIs for this multiple-year period, but instead defer their payment as well as spread the payment over future fiscal years. One-half of the payment, or about $1.7 million, will be paid only when: (1) STRS Ohio investment assets total $60 billion or higher at fiscal year-end; and (2) the total investment fund has a positive return. This latter provision is in keeping with an earlier board action that stated no PBIs would be paid in the future (beginning July 1, 2009) when the total investment fund has a negative return — regardless of the performance of individual investment associates against their respective benchmarks. The first payment of $1.7 million cannot be made before July 1, 2010. The remaining $1.7 million in PBIs can only be paid when: (1) STRS Ohio investment assets total $65 billion or more at fiscal year-end; and (2) the total fund has a positive return. This second payment cannot be made until at least July 1, 2011. As of Aug. 31, 2009, STRS Ohio’s total investment fund has a preliminary market value of $56.8 billion.

The board also approved a compensation study for investment associates. Currently, total compensation — base pay plus maximum PBI — for most STRS Ohio Investment Department associates is targeted at the bottom 25th percentile of total compensation levels in the private market. The study will include public and private sector data and will include a recommendation for the mix and amount of base pay versus variable pay for Investment Department positions.

Debate Over National Health Care Reform Is Front and Center
While Congress was not successful in meeting President Barack Obama’s desire for a vote on a health care plan before the summer recess, the topic continues to dominate discussion in Congress and in the media. While the details of reform are in flux until there is one bill, it is likely the focus will be on those who do not currently have health insurance coverage. For entities like STRS Ohio, the government will expect retirement systems to continue providing coverage to retirees. In this first round of reform, the impact for STRS Ohio will probably be at the outer edges, around long-term cost reductions in the national health care system. Over time, this could lower health care trend rates that impact STRS Ohio’s health care plan premiums. The August 2009 issue of STRS Ohio’s Legislative News includes an in-depth article about health care reform proposals and can be accessed via STRS Ohio’s Web site. Paper copies are available by calling (614) 227-2913.

2009 Retiree Series Ends Soon; Next Series Starts in January 2010
STRS Ohio offers the Retiree Series each year for retired members wanting information about how to build upon and sustain a financially secure retirement. During 2009, these meetings are focusing on the topic of Investing in Retirement — Managing Your Assets. During this three-hour meeting, guest speakers offer information about how to manage your income for a secure retirement, with topics that include: strategies to help manage risk, evaluating long-term care insurance, using annuities to fund retirement and how to better manage taxes.

A few sessions for 2009 still remain; programs are scheduled from 1–4 p.m. in the following cities:

For 2010, Estate Planning will be offered. This program will offer information on wills, durable powers of attorney and health care directive documents. Upcoming sessions will be offered in the following cities from 1–4 p.m.:

Advance registration for the 2009 and 2010 sessions is required. Register by calling toll-free 1-888-227-7877 or online (where directions are also available). You may register beginning one month before the date of the seminar.

'Banking Days' Highlighted
The vast majority of STRS Ohio benefit recipients use direct deposit for their benefit payments. These payments are posted on the first “banking day” of the month. However, since there are a few times during the year when the first day of the month is not always the first banking day, we’ve included this convenient “Clip & Save” coupon with each month’s banking day listed. These dates are also posted on the STRS Ohio Web site.

If you’re one of the few STRS Ohio members still receiving a paper check, we encourage you to consider moving to direct deposit. This free service ensures you won’t have to worry about delayed mail delivery or a check being lost or stolen. It also means you don’t have to travel to your bank to make deposits.

To benefit from the security and convenience of direct deposit, just complete a Direct Deposit Form available from the STRS Ohio Web site or by calling toll-free 1-888-227-7877.

Tax Information Will Arrive in Mid-January 2010
STRS Ohio benefit recipients should watch for their 1099-R form for 2009 to arrive in their mailboxes in mid-January 2010. This form details your previous year’s pension distribution for your use in calculating your income taxes. If you need the information contained on your 1099-R earlier in January, you can access your retirement account through STRS Ohio’s Web site. By using a password, you have convenient, secure online access to your personal account information. To request a password, follow the instructions on our Web site or call STRS Ohio toll-free at 1-888-227-7877.