At its October meeting, the State Teachers Retirement Board received a report of the annual pension valuation results from its actuarial consultant, PricewaterhouseCoopers (PwC). The report provides a "snapshot" of the actuarial position of the retirement funds as of July 1, 2012. This year's report shows the funding period for the pension fund increased slightly to 36.4 years, when calculated using the benefit changes resulting from the passage of Sub. S.B. 342. The funded ratio now stands at 64%.
A decrease in contributing payroll, caused primarily by the fact that there were nearly 5,000 fewer active members paying into STRS Ohio, led to the slight decline in overall funding progress. While fiscal year 2012 had a negative impact on STRS Ohio's funding, PwC's report noted that with the new benefit plan design in place, STRS Ohio should meet its 30-year amortization schedule within two years if actuarial assumptions — including a 7.75% investment return rate — are achieved.
Other notable items from this year's report include:
The system experienced a net gain in individual salary increases, since increases were smaller than expected.
The last phase of steep market losses from fiscal year 2009 was factored into this year's valuation. STRS Ohio uses a common accounting and actuarial technique called "smoothing" to spread investment market volatility over four-year periods. This method helps pension funds recognize investment returns for a given year over a four-year window rather than a one-year "spike." The pension fund has a net $1.7 billion in unrecognized gains being deferred to future years.
The Retirement Board approved 706 active members and 118 inactive members for service retirement benefits.
Other STRS Ohio News
Open Enrollment for the STRS Ohio Health Care Program Begins Nov. 1
The annual open-enrollment period for the STRS Ohio Health Care Program, including the dental and vision plans, for calendar year 2013 will be Nov. 1–20. Benefit recipients currently enrolled in an STRS Ohio health care plan will soon receive a personalized information packet about their 2013 plan options, monthly premiums and details about features of the hospital/medical and prescription drug coverage. During open enrollment, current enrollees may change plans and enroll dependents. Benefit recipients who do not currently participate in the program may enroll without a waiting period.
STRS Ohio is also offering its Health Care Highlights Meetings from Oct. 22–Nov. 12 at locations throughout Ohio to review health care plan information. The locations, dates and times of these meetings are available on the STRS Ohio website. Members can also view a presentation on the website that details open-enrollment options.
New TeleConference Enhances Member Experience, Improves Efficiency
STRS Ohio Benefits Counseling began conducting TeleConference sessions in September through the use of LiveLook software. The benefits counselor is able to produce the estimates during the session and then share the information on the counselor's monitor through the LiveLook website. The counselor provides a private access code to the member to view the estimates. The new process allows Member Benefits to conduct the TeleConference just like any other counseling appointment, with the member providing information in real time.
Annual Statement Printing and Mailing Completed
Members and reemployed retirees began receiving their Annual Statements around Oct. 1. This year, more than 2,000 members chose to receive an email notification that their statement is available on the Member Self Service (MSS) site. Regardless of whether a member received a paper statement, all members can view a PDF version of the June 30, 2012, statement in the MSS Secure Account. The secure site also provides up-to-date withdrawal values in the current statement of account.