From the State Teachers Retirement System Board News
Retirement Board Names Chair, Vice Chair
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, 2018. Board members receive no compensation for serving on the board other than reimbursement for actual, necessary expenses.
Board Adopts Fiscal Year 2019 Investment Plan
The Retirement Board voted to adopt the fiscal year 2019 Investment Plan presented by staff. The plan details staff’s investment strategy for each asset class in the system’s investment fund. The 2019 Investment Plan projects returns for the upcoming fiscal year at or near STRS Ohio’s policy objective investment returns of 6.84% and sustained momentum for above-trend global economic growth for the upcoming fiscal year.
The board’s investment consultants, Callan and Cliffwater LLC, reviewed and expressed support for the Investment Plan. Staff will evaluate the need to issue an addendum to the Annual Investment Plan once market levels are set on June 30, 2018. STRS Ohio will post the fiscal year 2019 Investment Plan on its website in early July. A copy of the plan is also available by request through STRS Ohio’s Member Services Center by calling toll-free 888‑227‑7877.
Board Discusses Plan Management Policy for Health Care Fund
STRS Ohio’s most recent valuation report showed that strong investment returns and good claims experience had a positive effect on STRS Ohio’s Health Care Fund. The Retirement Board has expressed its interest in preserving the Health Care Fund stability and at its June meeting discussed the value of adopting a plan management policy for the fund. A plan management policy is designed to provide the guidance necessary to help make the plan more stable, secure and reliable. It would also clearly communicate the Health Care Fund’s intent to the various stakeholders of the retirement system. The first steps in developing a management policy would include setting a goal for the Health Care Fund and a set of metrics to measure progress toward that goal. The board will continue its discussion on a plan management policy at its August meeting with a review of possible goals and objectives to consider. Additional discussion is expected in the months that follow.
Retirement Board Adopts Fiscal Year 2019 Budgets
The Retirement Board adopted the proposed system budgets for the 2019 fiscal year (July 1, 2018–June 30, 2019). The fiscal 2019 operating budget totals $101.7 million, an increase of 2.2% over the fiscal 2018 budget. The Retirement Board and staff continue to be mindful of expenses. The budget calls for a fifth straight year of declines in the total number of associates. STRS Ohio is budgeting for 538 full-time equivalent associates, down from a high of 735 associates in 2001. Other cost efficiency measures include lower spending on printing costs as more members opt for STRS Ohio’s online services.
The adopted capital budget for fiscal 2019 totals $4.2 million, an increase of about $890,000 over the current year budget. Capital projects for the year include a recap of the roof on STRS Ohio’s North Building, freight elevator improvements and final completion of the member and employer computer system upgrade. STRS Ohio reviewed its budgets with the Ohio Retirement Study Council during the Council’s May 2018 meeting.
The Retirement Board approved 483 active members and 78 inactive members for service retirement benefits.