At the December meeting of the State Teachers Retirement Board, CliftonLarsonAllen reported the results of its audit of the STRS Ohio financial statements for the fiscal year ending June 30, 2017. The report showed that the retirement system’s financial statements were fairly stated in accordance with generally accepted accounting principles and that no material weaknesses in internal controls or instances of noncompliance were found. As a result, STRS Ohio received an unmodified opinion — also known as a “clean” opinion — which is the highest level of opinion that an organization can achieve.
STRS Ohio’s financial statements are included in the 2017 Comprehensive Annual Financial Report, which will be posted on the system’s website by Dec. 29, 2017. In addition to the financial statements, the report includes investment, actuarial and statistical information about STRS Ohio. This report can also be requested by calling STRS Ohio’s Member Services Center toll-free at 888-227-7877.
Investment Cost Effectiveness Analysis Shows STRS Ohio Has High Investment Returns, Low Costs Compared to Peer Retirement Systems
CEM Benchmarking, a leading global research company, presented the results of its 2016 investment benchmarking study to the Retirement Board. The report compared investment data — both performance data and costs — for the five-year period ending Dec. 31, 2016, from more than 300 pension funds from around the world. Results of the study showed STRS Ohio’s five-year total net return of 9.7% ranked in the top quartile of CEM Benchmarking’s U.S. public fund universe. STRS Ohio’s strong performance was primarily due to its asset mix, which has a higher weighting in U.S. stocks and a lower weighting in fixed income than most other funds.
STRS Ohio also ranked third in its peer group of 17 large U.S. public pension fund sponsors for lowest investment costs. STRS Ohio’s strategy of using internal investment managers for about 70% of the system’s assets was the primary reason for its overall low costs. The report showed that STRS Ohio saved about $101 million in calendar year 2016 by using the internal management approach. The savings is based on the peer group’s median external management costs.
The Retirement Board approved 138 active members and 124 inactive members for service retirement benefits.
Other STRS News
Public Pension Coordinating Council Recognizes STRS OhioSTRS Ohio received the Public Pension Standards Award for Funding and Administration for 2017 from the Public Pension Coordinating Council (PPCC). The PPCC is a confederation of the National Association of State Retirement Administrators, the National Conference on Public Employee Retirement Systems and the National Council on Teacher Retirement. The awards recognize public pension plans that meet key standards in several assessment areas, including actuarial, audit, benefit programs and communications.