Retirement Board Begins Review of Pension Funding Policy
At the February meeting of the State Teachers Retirement Board, STRS Ohio staff presented a review of the board’s current funding policy. The board had expressed its interest in reviewing the policy following the adoption of a health care plan management policy at the December 2018 board meeting. The current pension funding policy was approved in March 2016 and the policy’s goal is to manage the risk of unanticipated benefit changes and to safeguard members’ benefits in the long term.
The funding policy references a funding scorecard that is based on the value of various metrics. These metrics include:
- Current and prior year’s funded ratio (the value of actuarial assets compared to the actuarial accrued liabilities).
- Current and prior year’s funding period (the amount of time needed until actuarial assets match actuarial liabilities if all assumptions are met).
- Likelihood that the pension plan’s funded ratio will be under 50% in the next 10 years.
- Likelihood that the pension plan’s funding period will be greater than 100 years in the next 10 years.
- Other economic considerations.
The board is expected to continue its review of the pension funding policy in the months ahead and will determine if an update to the policy and/or the metrics is necessary.
Survey Results Show Members’ Impressions of STRS Ohio
The Retirement Board reviewed the results of the 2018 membership survey conducted in November and December with active educators and retirees of the system. Key findings from the survey results included:
- More than nine out of 10 retirees and eight out of 10 active members have positive overall impressions of STRS Ohio.
- Trust and confidence in the system remained steady for both retirees (84%) and active educators (73%).
- About three quarters of retirees and three out of five active members have positive impressions of the Retirement Board; compared with last year, more members believe the board is headed in the right direction.
- Most members are satisfied with STRS Ohio communications — including email updates — with 91% of retirees and 84% of active members indicating that STRS Ohio keeps them well-informed about pension- and retirement-related issues.
- About seven out of 10 active members are setting aside additional savings for retirement.
- More than eight out of 10 retiree households have at least one source of income in addition to their STRS Ohio pension. Investments and spouse’s pension are the most common forms of additional income. On average, STRS Ohio provides 62% of retirees’ income.
The Retirement Board approved 176 active members and 133 inactive members for service retirement benefits.