STRS Ohio congratulates Arthur Lard, a high school teacher for Portsmouth City Schools, who will fill a contributing member seat on the board beginning Sept. 1. He was the only STRS Ohio contributing member to file enough completed petitions for the 2019 election by the deadline of Feb. 22, 2019. Since he is unopposed, in accordance with Ohio statute, no election needs to be held. The term for this seat expires on Aug. 31, 2023. Board members are not compensated for board service but may be reimbursed for actual necessary expenses incurred while serving on the board.
At the March meeting of the State Teachers Retirement Board, the board continued its discussion about updating its pension funding policy. The funding policy includes the board’s goal and objectives for funding member and retiree pension benefits. Following discussion at the board’s February meeting, staff shared a draft funding policy that included the goal to safeguard members’ benefits in the long term.
The Retirement Board reiterated its objective to reach a funded ratio of 100% (when plan assets are equal to the expected benefits to be paid to the membership). Staff projects that if the system’s experience matches its current economic and demographic assumptions, the plan will be 100% funded in 2034. The board also discussed the possibility of considering benefit changes before the plan is 100% funded. The board plans further discussion and possible adoption of an updated funding policy at its April meeting. STRS Ohio’s actuary, Cheiron, updates the plan’s funded ratio on an annual basis in its pension valuation report. The funded ratio as of June 30, 2018, was 75.5%.
The Retirement Board’s Ad Hoc Executive Director Search Committee held its first meeting and reviewed the executive director’s job description along with an estimated timeline for the proposed search process. Executive Director Mike Nehf plans to retire after his current employment contract ends on June 30, 2020. The committee recommended that STRS Ohio issue a request for proposal for a consultant to assist with the search.
The Retirement Board approved 68 active members and 60 inactive members for service retirement benefits.
CEM Benchmarking released the results of its annual Pension Administration Benchmarking survey for fiscal year 2018 activity and for the fourth year in a row, STRS Ohio received the top service level score. The survey benchmarks more than 40 participating pension systems, primarily from the United States, Canada and Scandinavia. STRS Ohio’s service level score was 95, compared to the median score of 81. STRS Ohio earned the highest service level score for each of the following areas of business: Pension Payments, Call Center, One-on-one Counseling, Pension Estimates, Member Presentations, Website, Annual Statements and Disaster Recovery. This is the 21st year that STRS Ohio has participated in the benchmarking study and the 11th time the system received the top score.
While the service level was at the top, the administrative cost per active member and annuitant remained at $105. STRS Ohio’s total administrative costs decreased by $300,000; however, the number of active members and annuitants decreased by about 800, resulting in a level cost per active member and annuitant. This continues a trend of reduced administrative costs.