The Finance Department presented proposed system budgets for the 2014 fiscal year (July 1, 2013–June 30, 2014) during the April meeting of the State Teachers Retirement Board. The proposed operating budget totals $90,504,600, a slight decrease from the current year’s budget. The proposed head count of 585 full-time equivalent associates reflects an increase of six positions for the coming year. The budget provides for the continued implementation of pension reform changes, refinements to the Defined Contribution and Combined Plans, and continued development of Health Care Fund options. The proposed capital budget for fiscal year 2014 totals $1,684,300. The Retirement Board will be asked to approve the budgets at its June meeting.
The Retirement Board approved 191 active members and 118 inactive members for retirement.
Other STRS Ohio News
STRS Ohio Presents 30-Year Funding Report to the Ohio Retirement Study Council
Ohio law requires the retirement systems to prepare a report when the amortization period for the unfunded pension liability exceeds 30 years. In March, STRS Ohio sent a letter to the Ohio Retirement Study Council (ORSC) to outline the fund’s plan to reach the state’s required 30-year amortization period. The letter noted that the passage of Substitute Senate Bill 342 significantly improved STRS Ohio’s funding and that the system’s actuarial
During the April 9 ORSC meeting, Council member Rep. Kirk Schuring (R-Canton) acknowledged STRS Ohio for its report and for the work the system did to craft a pension reform plan to improve the financial health of the retirement system. Rep. Schuring said it was noteworthy that STRS Ohio adjusted its actuarial assumptions during the process and made the sacrifices necessary to help strengthen the health of the fund. STRS Ohio later responded to a request from ORSC Chair Rep. Lynn Wachtmann (R-Napoleon) to provide information about the system’s compliance with the 30-year requirement during the past decade. consultant projects that if assumptions are met in each of the next two years, STRS Ohio should be back on a 30-year amortization schedule.
CEM Benchmarking Reports Improvements in Cost, Service for 2012
STRS Ohio received the CEM Pension Administration Benchmarking report for fiscal year 2012 showing STRS Ohio had the second highest service level score among its peer group of 14 systems and the third highest score among the total universe of 51 plans. The Call Center, One-on-One Counseling and Purchasable Service Estimate activities ranked first among all participating systems. STRS Ohio is on track to improve this service score again next year as projections are added to the annual statements, surveys are implemented for new pension inceptions, and tax withholding and bank changes are added to the Member Self-Service area of the website.
The report also reflected a reduction in administrative cost per member. STRS Ohio’s cost per member and annuitant is now below the average of all benchmark participants, but is higher than its peer group. Since 2006, STRS Ohio has reduced the per member and annuitant cost of administering the pension benefits, while the costs for the peer group continue to increase.