Plan Reselection Window Begins in Early 2019 for Eligible Members

STRS Ohio members who participate in the Defined Contribution Plan or Combined Plan and are in their fifth year of membership will have the option to reselect their retirement plan in early 2019. Members eligible for this reselection period were enrolled as new STRS Ohio members between July 1, 2014, and June 30, 2015.

Those eligible will be notified about the reselection option by early 2019. About four to six weeks later, those members will receive personalized reselection materials that include individual account balances, plan options and enrollment instructions. The retirement plan selected during this period will be permanent. Members can choose between STRS Ohio’s Defined Contribution Plan, Combined Plan or Defined Benefit Plan.

Eligible members who do not make a choice during the reselection period will, by law, remain enrolled in their current plan. Members who decide to switch from the plan they are now enrolled in will convert their current account to their new retirement plan choice on July 1, 2019.

If you have questions regarding the reselection option or about your eligibility for this choice, please call STRS Ohio’s Member Services Center toll-free at 888-227-7877.

NRS/STRS Ohio Website Offers Tools for Retirement Planning

Nationwide Retirement Solutions (NRS) and STRS Ohio want to help you plan for a secure retirement. Whether you are early in your teaching career or have your retirement date in mind, we are ready to provide you with the tools you need to reach your retirement goals. The NRS/STRS Ohio website is a helpful resource that offers secure access to your online account, a Learning Center that includes financial tools and calculators, and an online retirement planning tool called My Interactive Retirement PlannerSM that helps you assess your retirement readiness.

If you need more personalized assistance, you can reach an NRS Retirement Specialist toll-free at 866‑332‑3342.

Investments Annual Report to Arrive Soon

STRS Ohio’s Defined Contribution Investment Annual Report for fiscal year 2018 will mail in the coming weeks to all members participating in the Defined Contribution Plan or the Combined Plan. The report will also be available to view or print from the system’s website.

The annual report includes an economic overview describing the forces that shaped the markets during the past year and performance highlights and analysis for each allocation choice available in fiscal year 2018. You will also find a breakdown of defined contribution holdings and percentage of total assets by allocation choice and a disclosures section featuring important rules and concepts, as well as a glossary of frequently used investment terms.

Investor’s Corner

Rising Interest Rates

The Federal Reserve Board hiked the federal funds rate in September by a quarter point to 2%–2.25%. What does this mean for investors? It depends on how your money is invested. An increase in the federal funds rate is typically good for savings and money market accounts and CDs. However, the value of bonds typically moves in the opposite direction of interest rates.

Rate increases may not be good news for stocks, but this can vary by sector. Rising interest rates can cut into the profitability of companies and limit equity growth, but one notable exception is companies in the financial sector — these companies can perform better in a rising interest rate environment. The Federal Reserve has been increasing the federal funds rate for the past year and is expected to continue increasing the rate in 2019.

Investment Choice Profile

This quarter’s SmartTALK profiles the STRS MSCI ACWI ex USA Index Choice.

This allocation choice is intended to closely match the return of the Morgan Stanley Capital International (MSCI) ACWI (All Country World Index) ex USA Index, before fees. It is based on the share price of approximately 1,900 companies listed on stock exchanges in 22 developed and 24 emerging market countries. The return is comprised of capital appreciation plus dividend yield. Holdings from companies based in Japan, the United Kingdom, China, France, Germany, Canada and Switzerland make up about 60% of the index.

This allocation option could lose value over short or even long periods due to the volatility of common stocks. The share price and total return may fluctuate within a wide range, like the overall stock market. This choice is subject to a variety of risks which can adversely affect performance, including stock market risk, country risk and currency risk.

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How do I pick a Target Choice option?

STRS Ohio currently offers nine Target Choice options for your defined contribution account allocations. These options target a year in the future that would roughly match a participant’s retirement date. As the target date approaches, the more conservative the investment mix becomes — moving from a substantial allocation to stocks in the early years (for greater growth opportunities) toward a more balanced mix of stock and bonds (to reduce volatility) as the target date nears. These options are designed as single, comprehensive investment solutions for participants who plan to retire during the specified date ranges. You can learn more about these Target Choice options on STRS Ohio’s website.