Retirement Board to Consider Health Care Premium Rebate for Current Plan Enrollees Who Qualify
At the September meeting of the State Teachers Retirement Board, STRS Ohio staff presented its analysis of plan year 2021 health care claims experience and its impact on the Health Care Fund. Health care claims continue to be lower than projected when 2021 premiums were adopted. As a result, pending completion of the health care actuarial valuation in October by the board’s actuarial consultant, Cheiron, staff recommends a health care premium rebate for each enrollee with coverage in September 2021. The board is expected to consider taking action on this recommendation and will determine the amount of any possible rebate at its October meeting.
In October 2020, the board approved a health care premium rebate of $250 per qualified plan enrollee that was paid in the December 2020 pension payment.
Annual Investment Seminar Includes Economic and Asset Class Reviews, Asset-Liability Discussion
The Retirement Board spent most of its September meeting in its Annual Investment Seminar, presented by STRS Ohio Investment staff and the board’s investment consultant, Callan. Staff shared its five-to-10 year economic outlook that calls for steady to marginally slower activity throughout much of the global economy. Fixed income staff explained the role of this asset class in the portfolio — providing steady income to the fund, diversification and liquidity to pay benefits when needed. The fixed income outlook is for lower-than-normal returns due in part to the low interest rate environment. The real estate presentation reviewed the various sectors of the asset class and which ones are now poised for growth versus those that will be more challenging.
Callan’s presentation was a continuation of the board’s asset-liability study that helps determine investment risk-return expectations. This study helps the board determine its asset mix for the pension fund. Callan reviewed different investment strategies the board could consider employing — including liability-driven investing, leverage, risk parity and liquidity management. The board discussed with Callan the pros and cons of each of these approaches. The board will continue its asset-liability study in the months ahead.
Board Adopts Remote Meeting Attendance Policy
Amended Substitute House Bill 110 — the state of Ohio’s budget bill that passed in June — allows the Retirement Board to adopt a policy to allow board members to attend regular board meetings virtually. The bill included requirements that must be met in a proposed board policy on remote attendance — including limits on how often a board member can be a remote participant in a meeting and how many board members must attend in person at the physical location of the meeting. Following discussion, the Retirement Board approved the remote board meeting attendance policy which will be in effect starting with the October meeting and include the following provisions:
- Each board member shall be present in person for not less than one-half of the regular meetings of the board annually.
- At least one-third of board members attending the meeting shall be present at the physical location of the meeting.
State Teachers Retirement Board meetings will continue to be held in person and open to the public at the STRS Ohio office in Columbus. Board meetings are also broadcast with a link available on the STRS Ohio website one week prior to each meeting.
The Retirement Board approved 320 active members and 83 inactive members for service retirement benefits.
Other STRS Ohio News
Actuary file provides interesting facts about member and retiree longevity
STRS Ohio recently completed the actuary file for fiscal year 2021 and sent it to the system’s actuary for this year’s valuation report. The file provides insight to member and retiree longevity. As of June 30, 2021, STRS Ohio had 216 benefit recipients who are age 100 or older (up from 209 last year) — 181 are female and 35 are male. Most of these centenarians are service retirees, while 53 are beneficiaries of retirees or survivors of an active member who died, and two are disability recipients. The two oldest benefit recipients are age 109. The oldest retiree began teaching in 1931 for $900 a year. The retiree who has been receiving benefits the longest is a 108-year-old who retired in 1969 at age 56 after 35 years of service. STRS Ohio has been paying her for 52 years.
Active members have their own type of longevity in the classroom with 13 members having 50 or more years of service and 199 members exceeding 40 years of service in the classroom. STRS Ohio salutes these individuals and all STRS Ohio members for their service to Ohio’s students.
STRS Ohio earns GFOA Certificate of Achievement
The Government Finance Officers Association (GFOA) awarded STRS Ohio its Certificate of Achievement for Excellence in Financial Reporting for the system’s Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2020. Staff assembles financial, investment, actuarial and statistical information into one publication that meets the standards established by the GFOA to receive this recognition. STRS Ohio’s 2020 ACFR is available on the system’s website.