During its June meeting, the State Teachers Retirement Board elected retired teacher member Robert Stein as its vice chair for the coming year. According to Board Policies, Dale Price (Toledo Public Schools, Lucas County), who is currently serving as vice chair, automatically moves into the position of chair. Price and Stein will assume their new responsibilities on Sept. 1, 2013.
Retirement Board Accepts the Annual Investment Plan
The Retirement Board voted to accept the Investment Plan for fiscal year 2014 (July 1, 2013– June 30, 2014). The plan details staff’s investment strategy for each asset class in the system’s investment fund.
STRS Ohio staff expects only moderate growth in the capital markets during fiscal year 2014. With continuing concern about global financial stress, STRS Ohio will continue to monitor markets to assess risk levels. Investment associates expect the current low interest rate environment to continue into the next fiscal year. Staff will continue to implement asset allocation changes resulting from the 2012 asset-liability study.
Due to market volatility in June, staff will evaluate the need to issue an addendum to the annual Investment Plan once market levels are set on June 30, 2013. In early July 2013, the Fiscal 2014 Investment Plan will be posted on the STRS Ohio website. A copy of the plan can also be requested by calling STRS Ohio’s Member Services Center toll-free at 1-888-227-7877.
The Retirement Board adopted the proposed budgets for fiscal year 2014 (July 1, 2013–June 30, 2014). The operating budget totals $90,504,600, which represents a slight decrease from this year’s operating budget. STRS Ohio’s operating budgets have remained relatively flat for the past four fiscal years. The capital budget for fiscal year 2014 totals $1,684,300.
Throughout the fiscal year, the Retirement Board reviews each month’s expenditures and year-to-date expenditure totals as part of its regular meetings. The information is also posted on STRS Ohio’s website for members to view.
Retirement Board Approves Health Care Premiums for 2014
The Retirement Board approved the 2014 premiums for all plans offered through the STRS Ohio Health Care Program. A complete list of these premiums is posted on the system's website, or can be obtained by calling STRS Ohio’s Member Services Center toll-free at 1-888-227-7877. Additional information about the 2014 Health Care Program will be provided in upcoming newsletters and on the STRS Ohio website. In late October, all current enrollees will also receive personalized health care plan information in preparation for the fall open-enrollment period that extends from Nov. 1–Nov. 26, 2013.
In determining premiums, annual health care cost trend rates, as well as the claims experience of the plan enrollees, are taken into consideration. Plan changes approved by the board in May included delaying for one year the planned 0.1% reduction in the subsidy multiplier. This means that the multiplier will remain at 2.3% per year of service for 2014; so, retirees with 30 or more years of service will continue to receive the same subsidy for one more year. The final two steps to reduce the years-of-service multiplier to 2.1% will take place in 2015 and 2016.
The Retirement Board approved 1,066 active members and 92 inactive members for retirement.
Other STRS Ohio News
Catholic Health Partners to Purchase Kaiser Permanente
Kaiser Permanente notified STRS Ohio that Catholic Health Partners reached an agreement to purchase Kaiser Foundation Health Plan of Ohio and Ohio Permanente Medical Group, Inc. Catholic Health Partners is expected to continue to provide health care to current Kaiser enrollees and operate the existing Kaiser medical offices in Northeast Ohio.
Kaiser Permanente has indicated that Catholic Health Partners will honor the current STRS Ohio contract and plan designs. Once Catholic Health Partners receives regulatory approval — likely in fall 2013 — STRS Ohio Kaiser Permanente enrollees will receive new identification cards.
Cincinnati Physician Group May Exit Medical Mutual of Ohio Network July 1
Medical Mutual of Ohio (MMO) notified STRS Ohio that the University of Cincinnati Health Physicians are likely to exit the MMO provider network effective July 1, 2013. The four University of Cincinnati health facilities where these physicians practice will remain in the MMO network; inpatient and non-physician hospital services received at these facilities will continue to be paid as in-network services.
If the group terminates, MMO will mail letters to STRS Ohio enrollees who received services from these physicians during the past year. Those impacted will still have access to more than 6,000 providers in the Cincinnati area.