STRS Ohio Total Fund Returns +14.29% For Fiscal Year 2017
STRS Ohio’s total fund return for the year ending June 30, 2017, was +14.29%; it’s highest return since fiscal 2014. This follows returns of +0.92 in fiscal year 2016 and +5.45% in fiscal 2015. The value of investment assets as of June 30, 2017, was $75.1 billion, an increase of about $5.2 billion from the June 30, 2016, level of $69.9 billion.
The return beat the total fund benchmark by 0.63% after fees. The system’s active management of the funds, rather than relying on index funds, added approximately $400 million in value after all investment costs during the fiscal year. The strong performance was led by a +22.2% return on international investments and a +19.6% return on domestic equities. STRS Ohio’s fiscal 2017 total fund return ranked in the top 20% of Callan Associates’ public fund sponsor database. Callan serves as an investment consultant to the Retirement Board. While the investment returns are good news for the retirement system, STRS Ohio still needs to improve on its estimated funded ratio of about 75%.
STRS Ohio manages more than 70% of its assets through its in-house investment department. A report by CEM Benchmarking, a leading global research company, shows that STRS Ohio’s internal investment strategy is a key reason that the retirement system has the second lowest investment costs in its peer group of 17 large U.S. public fund sponsors. The report showed STRS Ohio saved about $102 million in 2015 alone by using the internal management approach. A portion of compensation for STRS Ohio’s investment staff is provided through performance-based incentive (PBI) payments. Based on the investment performance for fiscal year 2017, as well as the trailing five-year period, the Retirement Board approved PBI payments totaling approximately $9.22 million at its September 2017 meeting.
Fiscal Year 2018 Budget Reflects 2.8% Increase; Fiscal 2017 Operating Expenses Finish Under Budget
STRS Ohio’s adopted operating budget for fiscal year 2018 totals about $99.6 million, an increase of about 2.8% more than the fiscal 2017 budget. The capital budget for fiscal 2018 totals $3.3 million, an increase of 1.7% more than the fiscal 2017 budget. Final figures for fiscal 2017 show that STRS Ohio’s operating expenditures were approximately $96.5 million, about $340,000 less than the budgeted amount.
The Retirement Board and staff remain mindful of expenses. The fiscal 2018 budget is within one percent of the fiscal 2009 operating budget, and the number of full-time equivalent staff members has decreased from a high of 735 associates in 2001 to 544 associates in fiscal 2018. Throughout the year, the Retirement Board reviews monthly expenditure totals as part of its regular meetings. The information is also posted on STRS Ohio’s website following the board meetings.
Direct Deposit Keeps Funds Flowing Through Storms
STRS Ohio deposits benefit payments directly into members’ accounts on the first banking day of each month. Even as late August and September storms took a toll on Texas, Florida and much of the southeastern United States, benefit recipients who live in those areas saw their benefits deposited accurately and on time. Other than Ohio, the state where the most STRS Ohio benefit recipients reside is Florida, with about 7,500 benefit recipients. A little more than 900 benefit recipients live in Texas and 13 benefit recipients live on Puerto Rico.
Safeguards Keep Member Data Secure; What You Can Do to Protect Yourself
STRS Ohio has multiple layers of data security in place in an effort to keep member data safe from outside hackers. These safeguards recently thwarted an attempt to steal sensitive data related to about 40 members’ records. Some of the safety steps we take include storing your data behind our firewall and encrypting the data when it is being transmitted across the Internet. STRS Ohio also works with consultants who regularly monitor the security of the Online Personal Account section of the website. We regularly measure and evaluate the safety and security of our systems so you can be confident when you connect with us on the Web.
STRS Ohio wants to be sure you have the information you need to keep your identity safe at home,too. Following the Equifax data breach, the Federal Trade Commission (FTC) provided a number of steps consumers should take to protect their personal information from misuse.
The steps are outlined at consumer.ftc.gov. Here are a few of the precautions the FTC recommends:
Protect yourself after a data breach by:
- Checking your credit reports from Equifax, Experian and TransUnion for free by visiting annualcreditreport.com. Accounts or activity that you don’t recognize could indicate identity theft. Visit IdentityTheft.gov to find out what to do.
- Consider placing a credit freeze on your files. This will make it harder for someone to open a new account in your name. Keep in mind that a credit freeze won’t prevent a thief from making charges to your existing accounts.
- Monitor your existing credit card and bank accounts for charges you don’t recognize and report these disputes immediately.
STRS Ohio Earns GFOA Certificate of Achievement for its Comprehensive Annual Financial Report
The Government Finance Officers Association (GFOA) has awarded STRS Ohio the Certificate of Achievement for Excellence in Financial Reporting for the system’s Comprehensive Annual Financial Report (CAFR) for the 2016 fiscal year. STRS Ohio has received the award for 27 consecutive years. Staff consolidates financial, investment, actuarial and statistical information into one publication that meets the standards established by the GFOA to receive this recognition. STRS Ohio’s CAFR is available here.
Direct Deposit Dates
Remember, there are a few times during the year when the first banking day does not fall on the first day of the month. These banking days are posted on STRS Ohio’s website. Here are the direct deposit dates for the rest of this year and next.
|Nov. 1||Dec. 1||Jan. 2||Feb. 1||March 1||April 2||May 1||June 1|
|July 2||Aug. 1||Sept. 4||Oct. 1||Nov. 1||Dec. 3|