Health Care Plan Management Policy Discussion Continues
At the September meeting of the State Teachers Retirement Board, STRS Ohio Finance Department staff led a discussion about establishing a plan management policy for the Health Care Fund. A plan management policy is designed to provide the guidance necessary to help make the plan more stable, reliable and secure. The board has expressed interest in developing such a policy in light of recent improvements in the condition of the Health Care Fund as measured by the system’s actuary.
The September board discussion included how to measure the strength of the fund and communicate it in a way that is easy to understand. Data points and metrics the board may consider as part of a plan management policy include:
- The plan’s funded ratio — that is, the Health Care Fund’s assets compared to actuarial liabilities (projected health care coverage expenses earned to date by members of the system).
- The plan’s ability to withstand a reduction in government subsidies and recoveries.
- Plan resilience should pre-Medicare enrollment increase.
- The likelihood that the plan is sustainable for current and future benefit recipients (will remain solvent for at least 60 years).
- Various current and expected economic considerations.
- The pension plan’s funding period (the time needed to reach a 100% funded ratio if all results match assumptions). When the pension plan is sufficiently funded, the board could consider using additional funds for health care.
These measures would then be assigned point values that would be used to produce an overall score that would indicate if benefit adjustments should be considered.
With no employer contributions currently going into the Health Care Fund, staff said STRS Ohio should target a funded ratio above 100% to be in a better position to withstand market volatility. The Health Care Fund is now funded by premiums paid by enrollees, government reimbursements and investment earnings on these funds. STRS Ohio will get an updated look at the funded ratio at the October board meeting when the system’s actuary presents the annual pension and health care valuations.
The Retirement Board approved 329 active members and 82 inactive members for service retirement benefits.
Other STRS Ohio News
STRS Ohio distributing Annual Statement of Account to members
Annual Statements have been uploaded to members’ personal accounts. About 55,200 members have elected to opt out of receiving paper Annual Statements and will instead view this information online via their Online Personal Account. This represents an increase of about 6% over last year. The paper versions of the Annual Statements are being prepared to be ready for mailing in late September.
Actuary file provides interesting facts about STRS Ohio member and retiree longevity
The actuary file has been completed and sent to the Retirement System’s actuary, Cheiron, for the annual pension valuation report. The file provides insight to STRS Ohio member and retiree longevity. As of June 30, 2018, STRS Ohio had 216 benefit recipients who are age 100 or older — an increase from 190 last year. The 216 individuals include 191 women and 25 men. Most of these centenarians are service retirees; however, 71 are beneficiaries of retirees or survivors of an active member who died and two are disability recipients. The oldest STRS Ohio service retiree is a 108-year-old who began teaching in 1930 and retired in 1975.
The retiree who has been receiving benefits the longest is a 105-year-old recipient who retired in 1969 at age 56 after 35 years of service. STRS Ohio has been paying this retired educator for 49 years.
Active members have their own type of longevity in the classroom, with 16 members having 50 or more years of service and 146 members exceeding 40 years of service in the classroom. STRS Ohio salutes these educators for their service to Ohio’s students.