On Jan. 9, STRS Ohio’s actuarial consultant, The Segal Company, notified the retirement system that Segal had discovered it made an error in a calculation contained in Segal’s November 2013 Pension Valuation Report. Segal’s error does not affect STRS Ohio’s reported assets or liabilities, nor does it impact the retirement system’s reported unfunded actuarial liabilities or funded ratio.
Segal made a programming error that miscalculated future member contributions and the ability to pay off the system’s unfunded actuarial liabilities. Pension reform changes implemented in 2013 had a substantial impact on STRS Ohio’s financial condition, improving its funded ratio to 66.3% from 56.0% and reducing the funding period from infinity. Segal projects that, once corrected, the valuation will show that STRS Ohio’s funding period increased approximately four years beyond the 36.1 years previously stated in Segal’s November report.
STRS Ohio Executive Director Michael Nehf said the retirement system was disappointed to learn of Segal’s mistake, but emphasized that the error does not impact STRS Ohio’s ability to pay benefits.