Board Discusses Positive Health Care Valuation Report, Next Steps
At the March meeting of the State Teachers Retirement Board, STRS Ohio staff reviewed a summary of Segal Consulting’s health care valuation report that was presented last month. The report showed plan design changes, strong investment returns and good claims experience had a positive effect on the Health Care Fund in 2017. The Health Care Fund balance as of Jan. 1, 2018, was $3.69 billion. Segal said assuming the fund earns 7.45% in all future years and all other plan experience matches assumptions, the fund is now projected to remain solvent for all current members.
Plan design changes slated to begin in 2019 — freezing the current health care subsidy for non-Medicare enrollees and capping future subsidy increases at 6% for Medicare enrollees — had the most impact on the funding improvement. Staff shared that several of the components that factored into the positive valuation report are volatile in nature and are not predictable for 2018 and beyond. These components include investment returns, plan enrollment and utilization, inflation, government subsidies and taxes associated with the Patient Protection and Affordable Care Act. The board reviewed examples of potential investment returns based on the current asset mix for the fund, as well as examples based on a “reduced risk” portfolio. The board is expected to continue its discussion regarding health care funding in the months ahead.
The health care valuation report is completed on an annual basis; however, the timing of the next health care valuation has been moved to July 1, 2018, to align with the next pension valuation.
Retirement Board Election Materials to Mail in April; Two Contributing Member Seats to be Filled
Two contributing member positions on the State Teachers Retirement Board are up for election this spring. The 2018 Retirement Board election packet will mail in early April and will include information about the four candidates who qualified for the ballot. The four candidates are: Robert A. McFee, Benjamin Pfeiffer, Dale Price and Jeffrey Rhodes. The election packet will include instructions for casting votes online, by phone and by mail. Those eligible to vote in this election include all STRS Ohio contributing members, individuals who have contributions on deposit at STRS Ohio and disability benefit recipients. The deadline for voting is May 7. STRS Ohio will announce the results of the election following presentation of the election results to the board of tellers on May 12. The four-year terms for these seats begins on Sept. 1, 2018. Board members are not compensated for board service but may be reimbursed for actual necessary expenses incurred while serving on the board.
The Retirement Board approved 52 active members and 51 inactive members for service retirement benefits.