Ohio
Primary Election Tuesday, March 6, 2012
January STRS Board News
Callan Associates
Updates Retirement Board on Asset-Liability Study
At the January meeting of the State Teachers Retirement Board,
the board’s investment consultant, Callan Associates, provided additional research that the board requested in December
as part of its asset-liability study. The study will help the board determine the optimal portfolio allocation for the system’s
assets. Last month, Callan presented five potential asset mixes for the board to review, along with the projected short- to
medium-term rates of return for those mixes. At that time, the Retirement Board asked Callan to provide information on two
additional asset mixes. The board will discuss these results further at its February meeting.
The preliminary results
of the asset-liability study showed that STRS Ohio’s current investment policy target would be challenged to achieve
an 8% return during the next five to 10 years; however, based on historical data, Callan believes STRS Ohio could expect to
generate an 8% to 8.5% return over a 30-year horizon. The study also confirmed that without benefit changes that STRS Ohio
is currently seeking through S.B. 3 and H.B. 69, the system will eventually be unable to pay benefits. Unless the proposed
changes are fully implemented soon, Callan recommends reducing the risk in the investment portfolio to meet the liquidity
needs to pay benefits.
2011 Member Survey Results Presented
Results of membership
surveys conducted in December 2011 show that most STRS Ohio members — active and retired — continue to have positive
overall impressions of the system and the Retirement Board, and most still consider their pension an excellent or good value.
These
were just a few of the findings from the annual membership surveys presented at the board’s January 2012 meeting by
Dr. Marty Saperstein. His Columbus-based research firm, Saperstein Associates, conducted the survey for the ninth consecutive
year. The phone surveys involved 602 randomly selected participants (300 active members and 302 retirees) with surveys averaging
about 20 minutes in length.
This year’s survey results also showed the following:
About two out
of five active members plan to teach longer than they originally thought, and the most common reason cited for this is proposed
pension benefit changes.
About 73% of retirees consider the amount they pay for health insurance through STRS
Ohio an excellent or good value.
Most members are satisfied with system communications, including email updates.
There is interest in web-based communication and services and a continued need for communication about proposed pension legislation.
Nine
out of 10 retiree households have at least one source of income in addition to STRS Ohio. On average, STRS Ohio provides 63%
of retirees’ income.
Retirements Approved
The Retirement Board
approved 197 active members and 174 inactive members for retirement.
Other STRS Ohio News
STRS
Ohio Working with Pension Trustee Advisors on Pension Reform
In December, Pension Trustee Advisors (PTA), an
independent actuarial firm hired by the Ohio Retirement Study Council (ORSC) to study pension reform, sent a lengthy request
for background data to all five Ohio public retirement systems. PTA requested the information as part of its work to review
the pension reform plans that the retirement systems proposed — currently in Senate Bill 3 and House Bill 69. By the
mid-January deadline, STRS Ohio had responded with nearly all of the data requested. Any outstanding items are being addressed.
The information provided included board reports and policies, copies of our current and past Comprehensive Annual Financial
Reports, 30-year funding plans, health care plan information and additional studies and research.
Call
Center Service Levels Increase for Calendar Year 2011
Service levels increased significantly in the Member Services
Center (MSC) during 2011. The average wait time for a representative dropped to 29 seconds compared to 85 seconds in 2010,
and the abandon rate dropped to 1.9% compared to 6.5% in 2010.
Helping to increase the service level was the drop in
call volume from 322,000 in 2010 to 319,000 in 2011. Call activity increased regarding counseling services, service retirement
and account withdrawal, while the call volume relating to health care dropped due to an off year for dental and vision open
enrollment.
The MSC has eliminated the call menu for incoming calls. Members no longer need to select from a menu of
three choices when calling STRS Ohio; instead, they will hear a live person answer their call. In the past, a menu system
was used to help direct calls to the appropriate staff; however, member service representatives are now trained on all STRS
Ohio benefits and can take any incoming call. This change will eliminate confusion for members, as well as reduce repeat calls
when members hang up and try a different option during peak calling periods in hopes of getting a faster response.
Health
Care Plans’ Total Enrollment Unchanged by Annual Open Enrollment
Following a successful open-enrollment
period in November, the STRS Ohio Health Care Program is beginning 2012 with about the same number of enrollees as December
2011. There were 807 new enrollees and 1,080 terminations for a net decrease of 273 (0.2% decrease in total enrollment). More
than 12,000 plan changes were recorded between November 2011 and January 2012. More than two-thirds of these changes (8,174)
were Medical Mutual Plus Plan Medicare B only members who STRS Ohio proactively moved (i.e., the enrollee did not need to
do anything additional) to the Aetna Medicare Plan (PPO). Total enrollment in the STRS Ohio Health Care Program as of Jan.
1, 2012, stands at 122,540.
Tax Reporting Season Includes New Feature for Benefit Recipients
The
year-end tax reporting process for 2011 is under way — generating 161,634 Form 1099R tax statements that show slightly
more than $5.7 billion in distributions and $810 million in federal and Ohio taxes withheld. Tax statements began mailing
to benefit recipients on Jan. 17. Tax statements for QEBA excess benefit recipients (35) and non-resident aliens (approximately
175) are also part of this mailing.
Beginning Feb. 1, a new feature on the STRS Ohio member website will allow benefit
recipients online access to reprint their 1099R forms for 2011. Copies of 2010 and earlier tax statements will continue to
be available by request from our Member Services Center.
General Assembly should pass Ohio pension system reforms: editorial
Published:
Tuesday, December 27, 2011, 8:07 PM
By The Plain Dealer Editorial Board The Plain Dealer
The General Assembly does not need to await results of a newly commissioned (but largely redundant)
study before it acts on proposed reforms to Ohio's public pension systems.
Waiting any longer to put in place the
pension systems' carefully crafted solutions to what could be an actuarial time bomb would just compound lawmakers'
irresponsibility: The state's five public pension systems proposed fixes nearly a year ago, but the legislation to do so was wheelbarrowed off into the Statehouse equivalent of a storage shed.
The hour is late, and the stakes, for taxpayers
and public employees alike, are huge.
Delays already have driven up costs and could produce unintended consequences,
including a possibly disruptive flurry of early retirements by public workers believing, erroneously in many cases, that otherwise
they'll be subject to the new strictures.
The latest $240,000 study isn't aimed at breaking new ground, just
at double-checking 30-year solvency plans the retirement systems already have developed. It wouldn't even be necessary
if lawmakers had acted in a timely manner.
'--'Ohio's five public pension plans -- for public employees
generally, teachers, nonteaching school employees, police and firefighters, and Highway Patrol troopers -- have assets among
them of $163 billion and cover 1.5 million members, retirees and beneficiaries. Employees and taxpayers both contribute to
the plans -- and taxpayers could find themselves paying dearly if any of them failed.
Most everybody concedes that
changes are in order, given longer lives, sluggish investments and the political reality that the pension plans of many taxpayers
working in the private sector are much less generous.
Legislators introduced tandem House and Senate reform bills on
Feb. 1. They're complex; the summary for each exceeds 50 pages. Today's retirement rules would remain in force for
many public employees. For the rest, the bills would require public employees who want to collect a full pension to work more
years, or retire at a later age.
The bills would raise the employee contribution rates, now 10 percent of salary for
three of the five systems: to 11 percent for the Highway Patrol, 12.5 percent for the teachers (gradually, by mid-2015) and
12 percent for the police and firefighters (by 2013). The Public Employees and School Employees plans would remain 10 percent.
The legislation isn't unreasonable, and is much better than doing nothing. And legislators have the facts they
need to act, as the public interest demands.
Follow 
Election law referendum to appear on 2012 ballot
ORSC Chooses Pension Trustee Advisors to Review Pension Reform Plans
(posted Nov. 18, 2011)
At its Nov. 16 meeting, the Ohio Retirement Study Council
(ORSC) heard presentations from three firms vying for the opportunity to advise the Council on the pension reform plans currently
in pending legislation (S.B. 3 and H.B. 69). Following the presentations and question-and-answer sessions with each firm,
the ORSC unanimously selected Pension Trustee Advisors (PTA) to conduct the review.
