During the February meeting of the State Teachers Retirement Board, the board and staff continued discussion on funding policy elements and potential improvements to the current funding policy. The pension fund currently uses a 30-year open amortization method — meaning the unfunded accrued actuarial liability (UAAL) is re-amortized over a new 30-year period every year. In an effort to put greater focus on improving system funding, the board agreed to adopt a 30-year closed funding period beginning July 1, 2015. Closing the funding period effectively targets a date when the UAAL will be paid off and the pension fund will be fully funded, strengthening the pension fund’s ability to provide a secure retirement for STRS Ohio members. Further, a closed funding period provides a good benchmark to compare to and will help the pension fund better manage volatility in the future.
The Retirement Board will continue its funding policy review in March with a presentation on plan volatility based on the pension fund’s current asset mix. The board will also discuss at a future meeting under what financial conditions it might consider adjusting benefits to maintain long-term financial stability.