Proposed STRS Ohio Operating Budget for Fiscal Year 2021 Reflects Decrease From Current Year Budget
At the May meeting of the State Teachers Retirement Board, STRS Ohio’s Finance Department presented its proposed system budgets for fiscal year 2021 (July 1, 2020–June 30, 2021). The proposed operating budget totals $104.2 million, a decrease of 0.2% from the current year budget. The budget proposal reflects 530 full-time equivalent associates, down from 535 in the current year and marks the seventh straight year of headcount declines. The proposed budget includes a 1.5% decrease in compensation, which includes smaller expected performance-based incentive payouts, reduced headcount, no new full-time positions, and modest merit increases, promotions and adjustments. The proposed budget also reflects a decrease of $500,000 in STRS Ohio’s costs for associate medical/hospitalization insurance coverage, a decrease in contract services and lower global custody banking fees. Areas with projected cost increases include data processing equipment, investment research services and quotation and analytic services.
The proposed capital budget for fiscal year 2021 totals $5.2 million, an increase of 4.5% over the current year’s budget. This includes costs to replace the 25-year-old legacy investment accounting system, as well as information technology upgrades and enhancements.
Expense information is posted on STRS Ohio’s website each month, and detailed payments by vendor are also uploaded to the Ohio Treasurer’s Open Checkbook site each year.
Board Reviews Proposed Health Care Changes for 2021
STRS Ohio Member Benefits staff presented the Retirement Board several proposed changes for the STRS Ohio Health Care Program for plan year 2021. Staff did not share specific premium amounts at the May meeting, but indicated better than expected claims, government reinsurance and rebate experience should have a positive impact on premiums for Medicare enrollees. Premiums for plan year 2021 are expected to be shared at the June board meeting.
Proposed health care plan changes under consideration include:
- Extending the Medicare Part B Partial Reimbursement program.
- Adjusting eligibility for the Health Care Assistance Plan to a percent of the Federal Poverty Limit.
- Providing a level of subsidy inflation protection for pre-Medicare enrollees if Medicare trend (expected cost increases) is less than 6% in a given year.
- Increasing prescription drug maximum out-of-pocket limit to $6,550 from $6,350 for the Medicare plans to keep them aligned with the 2021 standard Medicare prescription plan. The proposed $5,100 out-of-pocket limit for non-Medicare enrollees is unchanged from the current year.
- Increasing the annual deductible for prescription drugs to $275 from $250 for Medicare and pre-Medicare plans.
The board is expected to discuss these proposed changes along with 2021 premiums at its June meeting. Once approved by the board, plan changes and premiums for the 2021 plan year will be posted on the STRS Ohio website and outlined in upcoming newsletters.
Price Wins Contributing Member Seat on Retirement Board
Contributing teacher member Dale Price was reelected to the State Teachers Retirement Board in the 2020 election that concluded on May 4. Price is a high school mathematics teacher and mathematics department chair with the Toledo Public Schools. The term for this seat runs from Sept. 1, 2020, to Aug. 31, 2024. Board members receive no compensation for service on the board other than reimbursement for actual, necessary expenses.
The Retirement Board approved 82 active members and 109 inactive members for service retirement benefits.
Other STRS Ohio News
Delta Dental offers one-month premium holiday
Delta Dental is providing a one-month premium holiday to STRS Ohio enrollees as part of its Pandemic Relief Program. Benefit recipients enrolled in the dental plan in June will see their June benefit payment adjusted to reflect this one-time dental premium credit. The regular monthly dental deduction will resume in July. More than $3 million in monthly premiums will not be charged to 79,000 recipients due to the premium holiday. Delta Dental’s intent is to help enrolled retirees and their family members with pandemic-related financial burdens.
STRS Ohio offices remain closed to the public
STRS Ohio continues to monitor the state of Ohio’s guidelines to limit the spread of COVID-19. Only a small number of staff members are working at the Broad Street office, completing tasks that cannot be done remotely. The rest of STRS Ohio’s staff members are working from home and providing the quality services that our members expect and deserve. We anticipate allowing additional staff members to return to working in the office sometime in June and will continue to evaluate when it may be appropriate to open the Broad Street office to all associates and the public.