During its June meeting, the State Teachers Retirement Board elected contributing teacher member Carol Correthers (Lorain City Schools, Lorain County) as its vice chair for the coming year. According to Board Policies, retired teacher member Robert Stein, who is currently serving as vice chair, automatically moves into the position of chair. Stein and Correthers will assume their new responsibilities on Sept. 1, 2014. Board members receive no compensation for serving on the board other than reimbursement for necessary expenses.
Fiscal Year 2015 Budgets Adopted
The Retirement Board adopted the proposed budgets for fiscal year 2015 (July 1, 2014–June 30, 2015). The operating budget totals $91,482,200, an increase of 1.1% over the current year’s budget. STRS Ohio’s operating budgets have remained relatively flat for the past five fiscal years. The capital budget for fiscal year 2015 totals $1,597,500, a decrease of about 5.2% from the current year’s budget.
Throughout the year, the Retirement Board reviews monthly expenditures and year-to-date expenditure totals as part of its regular meetings. The information is also posted on STRS Ohio’s website following the board meetings.
Board Accepts Fiscal Year 2015 Investment Plan
The Retirement Board voted to accept the annual Investment Plan for fiscal year 2015. The plan details staff’s investment strategy for each asset class in the system’s investment fund.
The 2015 Investment Plan forecasts moderate growth in the capital markets. The annual plan noted that STRS Ohio’s total fund return for fiscal year 2013 exceeded 13%, and fiscal year 2014 year-to-date returns are also above 13%. A more moderate positive return is expected for fiscal 2015.
Staff will evaluate the need to issue an addendum to the Annual Investment Plan once market levels are set on June 30, 2014. STRS Ohio will post the Fiscal 2015 Investment Plan on its website (www.strsoh.org) in early July. A copy of the plan is also available by request through STRS Ohio’s Member Services Center, 1-888-227-7877 (toll-free).
The Retirement Board approved 2015 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 2015 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. 1–25, 2014.
When determining premiums, the Retirement Board and STRS Ohio staff consider annual health care cost trend rates, as well as the claims experience of the plan enrollees. The 2015 premium subsidy will reflect a 0.1% reduction in the years-of-service multiplier to 2.2% per year of service. This means retirees with 30 or more years of service will receive a premium subsidy of 66% in 2015. The board approved this decrease in the subsidy multiplier in 2011 as part of a phased-in plan to ultimately reduce the subsidy multiplier to 2.1%. The final year of the phased-in reduction will take place in 2016.
Below is a sample of premiums for calendar year 2015 for a benefit recipient with 30 or more years of service.
The Retirement Board approved several changes to the STRS Ohio Health Care Program that will take effect in the 2016 plan year. These changes are designed to be consistent with the strategic framework adopted by the board in 2011 to extend the viability of the health care program’s funding.
The STRS Ohio Health Care Program changes approved to take effect in 2016 include:
Medical Mutual Plans
•Discontinue the Plus Plan.
•Increase the Basic Plan deductibles and coinsurance out-of-pocket limits.
–In-Network: Deductible increases to $2,500 from $2,250; out-of-pocket limit increases to $4,000 from $3,700.
–Out-of-Network: Deductible increases to $5,000 from $4,500; out-of-pocket limit increases to $8,000 from $7,400.
•In-Network: Deductible decreases to $150 from $300; skilled nursing/home health care coinsurance increases to 2% from 0%.
•Out-of-Network: Out-of-pocket limit increases to $2,500 from $2,000; specialist physician office visit copay increases to $55 from $50; skilled nursing/home health care coinsurance increases to 4% from 0%; and coinsurance percentage increases to 8% from 6%.
Express Scripts Plan
•Change the maximum allowable amount to the 2016 standard Medicare Part D limit.
•Continue offering AultCare, HealthSpan and Paramount if they add value to STRS Ohio’s overall plan offerings and all enrollees in an equitable and consistent manner.
•By 2016, minimize coverage differences by making plans similar to the Basic Plan (for non-Medicare) and the Aetna Medicare Plan (for Medicare), creating coverage and actuarial equity.
•By 2018, structure created that addresses excise tax concerns of minimizing the Patient Protection and Affordable Care Act excise tax impact.
The Retirement Board approved 722 active members and 107 inactive members for service retirement benefits.
Other STRS Ohio News
STRS Ohio Receives Government Finance Officers Association (GFOA) Award
STRS Ohio recently received the Certificate of Achievement for Excellence in Financial Reporting for its 2013 Comprehensive Annual Financial Report. The retirement system has received the GFOA award every year since 1990. STRS Ohio consolidates financial, investment, actuarial and statistical information into one publication that meets the standards established by GFOA to receive this recognition.