May Board News

Board Reviews Benefits Comparison of Teacher Retirement Systems

During the May meeting of the State Teachers Retirement Board, STRS Ohio staff presented a comparison of pension benefits provided by U.S. teacher retirement systems along with contribution rates. Statewide plans have been modified in 42 states since 2010, following the great recession. STRS Ohio compares well overall versus the other 12 states that do not contribute to Social Security. STRS Ohio’s total contribution rate is the fourth lowest among plans in non-Social Security states and its actuarial funded ratio of 80.1% is the third highest. STRS Ohio’s service retirement benefit is near the midpoint (ranked by the percent of final average salary) for a member retiring with 34 years of service at age 56 — the current eligibility for an unreduced retirement at STRS Ohio is 34 years of service. The research also showed STRS Ohio is one of just seven systems (among non-Social Security states) providing subsidized health care coverage. Presentation data was gathered through system websites, financial reports, National Council on Teacher Retirement (NCTR), National Association of State Retirement Administrators (NASRA) and interviews with system staff.

Board Discusses Economic Assumptions With Actuary

The Retirement Board completed its annual review of economic assumptions with its actuarial consultant, Cheiron. Following discussion, Cheiron did not recommend any changes to STRS Ohio’s current economic assumptions of a 7% discount rate (also used as the assumed investment return), a 2.5% inflation rate and a 3% payroll growth rate.

Ohio Retirement Study Council Meeting Reviews Investment Performance, Addresses False Claims About STRS Ohio

In response to a board member’s question, STRS Ohio Executive Director Bill Neville related a number of questions asked by Ohio Retirement Study Council (ORSC) Chair Phil Plummer (R-Dayton) during the Council’s May 12, 2022, meeting. Neville stated Chair Plummer took the opportunity to address a number of questions regarding STRS Ohio that he and ORSC staff had received. These included false allegations that STRS Ohio members receive only 77 cents for every dollar they contribute, that STRS Ohio staff is receiving a 6% raise, that STRS Ohio investment returns are among the worst in the nation and there is a lack of transparency. Neville indicated that ORSC staff provided detailed information correcting each of those claims by informing the Council that:

• STRS Ohio retirees receive benefits equal to their contributions within two to three years of retirement, depending on when they retired.

• The increase in the STRS Ohio personnel cost is due largely to the fact that there are 27 pay periods in fiscal year 2023, instead of the usual 26 pay periods, which is true every 10 to 11 years for any employer that pays its employees on a bi-weekly basis.

• Despite efforts, ORSC staff has not seen data to support the claim that STRS Ohio investment returns are the worst in the country — and the recent report from the Council's investment consultant RVK directly refutes that allegation, showing that STRS Ohio’s total fund return over the one-, three-, five-, seven- and 10-year time periods ending Dec. 31, 2021, all ranked in the top 25% of the consultant’s database of plans with investment assets of $1 billion or more.

Chair Plummer questioned Neville about criticisms of a lack of transparency at STRS Ohio. Director Neville noted that STRS Ohio responds to over 100 public record requests annually and has been recognized by the Auditor of State’s office for its handling of public record requests; STRS Ohio streams all board meetings and posts them on the website; and staff has been working to make alternative investment fees more transparent on an industry-wide basis. The ORSC’s May 12 meeting is available on the Ohio Channel.

STRS Ohio Reports on System’s Broad Street Offices

STRS Ohio staff shared with the board a review of the current state of the system’s Broad Street offices. The initial building was constructed in 1958, and there have been three expansions to the building since then. The final phase was completed in 1998. Executive director Bill Neville noted that the building was developed over the decades with one purpose in mind — use by a single tenant, STRS Ohio. The board that approved the 1998 expansion planned enough space for an anticipated staffing level of about 800 associates — needed to provide a high level of customer service for an expected wave of baby boomer retirements. STRS Ohio’s current staffing level is about 500.

Retirements Approved

The Retirement Board approved 65 active members and 64 inactive members for service retirement benefits.

Other STRS Ohio News

Foreman, Jones, Sellers Win Seats on the Retirement Board

Contributing teacher members Steven Foreman and Julie Sellers were elected to the State Teachers Retirement Board in the 2022 election that concluded on May 2. Foreman is an assistant superintendent for Zanesville City Schools, and Sellers is the president of the Cincinnati Federation of Teachers. In the contest for the retired member seat, Elizabeth Jones was elected to her first term on the Retirement Board. She retired from Cincinnati Public Schools where she taught English/Language Arts.

The term for these seats runs from Sept. 1, 2022, to Aug. 31, 2026. Board members receive no compensation for service on the board other than reimbursement for actual, necessary expenses.

Retirement Board Meetings Available Online in Real Time and Posted on Website

The State Teachers Retirement Board meetings are open to the public. For those who cannot attend, the meetings are accessible in real time through a link to GoToWebinar. The link is available through the Public Meeting Notice that is posted on the home page one week before each meeting. STRS Ohio also posts a recording of the meeting along with the meeting presentation slides on the Most Recent Board Meeting Materials page on its website in the Retirement Board section. The recording is posted the week following the board meeting to allow for closed captioning to be added.

STRS Ohio introduces Summary Annual Financial Report

STRS Ohio has developed a new publication to share basic information and statistics about the retirement system. The Summary Annual Financial Report (SAFR) is a reader-friendly summary of the more detailed Annual Comprehensive Financial Report. The SAFR includes information on funding and investments, financial highlights, membership, the economic impact STRS Ohio has on the state of Ohio and more. The new 16-page publication provides key data in a streamlined format. The SAFR is posted on the STRS Ohio website under Annual Reports. Click here to view the SAFR.