Ohio has several new laws for 2019, including teaching cursive handwriting to your kids Here is a look at just some of the laws coming online in 2019:
Cursive Handwriting: HB 58 The battle over whether or not to teach cursive handwriting is over thanks to a new law. The Ohio Department of Education must now make sure all students can read and write printed letters by third grade and cursive by fifth.
Minimum Wage: HB 576 Starting Jan. 1, 2019 the state will increase the minimum wage from $8.30 to $8.55 and hour, for non-tipped employees. For those who make tips, your minimum wage goes from $4.15 to $4.30 and hour.
Landline cost increase: HB 402 There are fewer and fewer people who have a wired landline phone so the public utilities asked for and got the chance to raise rates by $2 a month instead of the current cap of $1.25.
Lawmaker pay raises: SB 296 Lawmakers approved raises for themselves, and for more than what is considered a cost of living raise. The increases are as follows: In calendar year 2019, by four percent In calendar year 2020, by four percent In calendar year 2021, by three percent In calendar year 2022 through 2028, by one and three-quarters percent .
State budget activity
Gov. Mike DeWine signed into law House Bill 166, the state biennial budget bill. Before approving the legislation, the governor line-item vetoed 25 provisions.
The Ohio Education Association (OEA) welcomes the progress made by state lawmakers on some fronts in the state budget. However, OEA is disappointed that more could not have been achieved on important issues, notably the repeal of the failed state takeover of troubled school districts which was overwhelmingly supported by the House in its adoption of HB 154. To view a summary of HB 166, click here. OEA President Scott DiMauro noted that a moratorium on new Academic Distress Commissions in the budget deal is a tacit admission of what educators, parents, students and an increasing number of legislators know to be true – that state takeovers don’t serve the interests of the students they were intended to help. “Sadly, the legislature leaves the communities of Youngstown, Lorain and East Cleveland languishing under a failing law until they can figure out how to give districts struggling with high levels of poverty the support they need,” said DiMauro. “As we continue the fight to enact HB 154 to repeal state takeovers and restore local control, I am deeply disappointed in the decision to allow CEOs to continue wreaking havoc on our schools.” On the plus side, OEA commends Governor DeWine for his line-item veto of a provision that would have eliminated the requirement that teachers and paraprofessionals be properly certified or licensed by the Ohio Department of Education. OEA opposed this provision because it would have removed an important protection for students and the education profession. OEA is committed to serving students with highly-prepared educators. OEA is pleased to see the expansion of school breakfast programs in high-poverty districts and welcomes the significant new funding for wrap-around services in those districts that help students get ready to learn. OEA also applauds lawmakers for taking a small but important step toward fixing Ohio’s misleading report card system by adjusting the value-added grading scale to give school districts more credit for the progress they have made with students.
OEA is encouraged by requirements that charter e-schools disclose more information about their operations. However, OEA is disappointed with budget provisions that dial-back on accountability for charter sponsors and drop-out prevention charter schools. Lastly, OEA believes strongly that the expansion of voucher programs in the budget is unnecessary. “Ohio has no shortage of vouchers to pay private school tuition on the taxpayer’s dime,” said OEA President Scott DiMauro. “It is time to end the unnecessary and costly expansion of vouchers and focus on meeting the needs of all students in Ohio’s public schools.”
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I remind ORTA membersthat this group is NOT affiliated with ORTA in any way. I also remind
our membership that, in the 2 years I have attended the STRS meetings,
HPA meetings, and ORSC meetings, I have not seen anyone from POP 5
present. One statement in the most recent membership request from this
group is that older retiree associations have not been able to
accomplish much for you, recently. I would suggest that, while ORTA
efforts have not accomplished the goal of having COLA restored, ORTA
has been effective in several areas including:
* ORTA was effective in having the language in the loss of COLA
changed from eliminated to suspended. This was no easy task as the
STRS folks had determined that COLA was to be eliminated, forever. As
things stand our COLA is being reconsidered each year.
* ORTA was successful in getting the STRS Board to change the funding
policy (the policy that controls our COLA) from requiring a system
that is 100% funded to 85% funded. This is significant when one
considers that the STRS system has NEVER been funded at 100%. 85% is a
tall order but 100% was simply not realistic.
* ORTA was successful in maintain the $30 per month subsidy for all
Medicare eligible retirees. This was scheduled to cease in January of
2019 but continues as a result of ORTA (and others) hard work.
Another statement that I find troubling in the POP 5 letter is that
the retirement system is a well that is running dry. I disagree. In
fact, our system is better funded now that the historical average
funding level. So, a picture intended to frighten retirees into paying
dues to an organization that is absent from all meetings concerning
STRS is dubious.
STRS Budget
The budget for fiscal year 2020 (beginning July 1, 2019) for STRS
will be voted upon at the meeting of the STRS Board of Trustees on
June 20, 2019. Probably the most interesting aspect of the proposed
budget is the increase in compensation for STRS employees. When
factoring in a decreasing headcount in the number of employees at STRS
and a 3% compensation increase, the employees at STRS will see a 4.8%
increase in pay. This does not include the increases proposed to the
performance-based incentives that the investment people will receive.
These increases in wages to the people that manage our retirement
system are controversial, to say the least. ORTA has spoken against
the optics of giving raises to the STRS employees in the face of
reductions for retirees (loss of COLA) and increases in contributions
of actives. To be clear, these raises for STRS employees would not
provide sufficient funding for a COLA, however, the notion of shared
sacrifice is important. ORTA has suggested that everyone involved with
the STRS system, active contributors, retirees, and STRS employees
should share in the sacrifices that are required to strengthen the
pension system. ORTA will continue to voice opposition to the loss of
COLA, while witnessing the steady increase in wages for STRS
employees.
Best Regards,
Dr. Robin Rayfield, ORTA Executive Director
Richland County Retirement Seminar planned for September 17th. Ruth Pierce is planning the event.
May STRS OHIO Board NewsPosted: May 17, 2019Retirement Board Considers Pension Funding Perspectives, Adopts Amendments to Its Funding PolicyAt the May meeting of the State Teachers Retirement Board, STRS Ohio Finance Department staff shared some historical perspectives regarding the current pension funding status. As STRS Ohio approaches its 100th anniversary, it’s important to recognize that some demographic and economic characteristics have changed over the years, and these changes have had a significant impact on plan funding. Key points from the presentation include:
- Ratio of active members to beneficiaries has dropped — As a mature plan, the ratio of active members to beneficiaries has dropped to about 1.1 to 1 (about 170,000 active teachers and 157,000 beneficiaries) — compared to 20 years ago when the ratio was about 1.8 to 1 (about 170,000 active teachers and 92,000 beneficiaries). With Ohio birth rates dropping steadily over the past five or more decades, there are fewer students to educate, which could erode the number of active teachers needed
in the future. - The pronounced growth in the number of benefit recipients means that STRS Ohio has a negative cash flow — Meaning the fund pays out about $4 billion more in benefits each year than it collects in contributions. The balance is expected to be made up with investment returns. STRS Ohio needs to earn nearly 6% on investment returns to make up for the negative cash flow and must earn 7.45% to meet the expected needs of the retirement system.
- Economic environment has reduced risk-free rates of return considerably over the past 20–30 years, so investments must take on more risk — Staff shared that the 10-year treasury rates stood at 8.82% in 1988, versus 2.85% in 2018. This requires the pension fund to place a higher percentage of its portfolio in stocks and other volatile assets than it did 30 years ago in order to earn its assumed investment rate of return. Doing so increases the risk that the portfolio in a given year could lose assets during a market downturn and in these instances, the $4 billion in negative cash flow impacts the funding status even more.
- The likelihood of lower-than-expected investment returns leading to a funded ratio of less than 50% is reduced as the funded ratio improves — The changes in plan maturity and economic context combine to make the pension fund much more vulnerable to economic downturns. With its current asset mix, STRS Ohio faces about a 29% chance that the pension fund could drop below a 50% funded ratio in the next 10 years; however, the resiliency of the plan improves faster as the plan goes from a 75% funded level to a 90% funded level.
The funding objectives in the policy include:
- 100% funding.— At 85% or greater, the Board may consider plan changes that in the determination of the Board’s actuary do not materially impair the fiscal integrity of the system.
- Manage the risk of unanticipated benefit changes.
- Intergenerational equity, to the extent consistent with other funding objectives.
- Transparency and accountability.
Board Reviews Proposed Health Care Changes, Premium-Setting Strategy for 2020 Plan YearSTRS Ohio Member Benefits staff presented its proposed changes for the STRS Ohio Health Care Program for plan year 2020, along with its proposed strategy for setting premium subsidy rates. Staff reported that claims experience continues to trend in a positive direction and that should result in smaller premium increases than expected. Specific premium amounts were not part of the proposal but are expected to be shared at the June board meeting.
Proposed health care plan changes include:
- Extending the current Medicare Part B Partial Reimbursement program for one year. Under this program, benefit recipients currently enrolled in the STRS Ohio Health Care Program and Medicare Part B receive $29.90 per month to reimburse a portion of the Medicare Part B premium. The reimbursement was set to be reduced to $0 beginning Jan. 1, 2020. This impacts about 85,000 benefit recipients.
- Increasing prescription drug maximum out-of-pocket limit to $6,350 from $5,100 for the Medicare plans to align with the 2020 standard Medicare prescription plan.
- Modifying the specialty drug coinsurance for Medicare enrollees — changing the specialty drug coinsurance to the lesser of 13% or $450 per 31-day period from the lower of 13% or $550 per fill.
- Adding SaveonSP manufacturer copay assistance program — manufacturer pays higher copay with a $0 balance to the enrollee and net cost is lower for STRS Ohio.
- Adding 24-hour nurse line to the Medical Mutual Basic Plan for non-Medicare enrollees.
- Requiring transplants to be performed at Organ Transplant Centers of Excellence.
- Moving enrollees in the regional AultCare PPO plan to AultCare’s Medicare Advantage Plan.
Retirements ApprovedThe Retirement Board approved 46 active members and 53 inactive members for service retirement benefits.
Other STRS Ohio NewsSTRS Ohio to recognize 100th anniversary — A Legacy of Service to Ohio EducatorsSTRS Ohio will recognize its 100th anniversary during fiscal year 2020, (July 1, 2019–June 30, 2020), after a century of providing retirement benefits and quality service to its members. The 100th anniversary is a milestone worthy of acknowledging as we focus on strengthening the organization’s financial position and continue the mission to partner with members in helping to build retirement security. The framework for the year is an outward focus on both active and retired members, honoring Ohio’s teachers for their contributions to society — and to recognize the milestone and offer opportunities to further engage members, stakeholders and associates.
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