Upcoming STRS Ohio Studies Planned
STRS Ohio’s new fiscal year began on July 1, and the retirement system plans to kick off several important studies beginning this fall. Last fiscal year was notable as most of STRS Ohio staff worked from home and continued to provide a high level of service to our members, employers and stakeholders. It was also a strong year for investment returns. The retirement system pays about $7.4 billion in benefits and collects about $3.4 billion in contributions, so investment returns are vital to the health of the pension fund.
STRS Ohio looks forward to the guidance these audits and studies will provide in what is expected to be the next nine to 18 months. Here is a brief description of the upcoming work:
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Retirement Board’s Virtual Meetings Recorded, Posted to System WebsiteThe State Teachers Retirement Board has met virtually since its May 2020 meeting, with meetings open to the public via a link to GoToWebinar. The link is available through the Public Meeting Notice that is posted on the system’s website. STRS Ohio posts a recording of the meeting along with the meeting presentations on the Most Recent Board Meeting Materials page in the Retirement Board section. The recordings are available early in the week following the board meeting to allow for closed captioning to be added.
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Correthers, Fichtenbaum, Win Seats on Retirement BoardContributing teacher member Carol Correthers was reelected to the State Teachers Retirement Board in the 2021 election that concluded on May 3. Correthers is an intervention specialist for emotionally disturbed students for Lorain City Schools. In the contest for the two retired member seats, Rudy H. Fichtenbaum was elected to his first term on the Retirement Board. He retired from Wright State University, where he was an economics professor. Robert Stein was reelected to a retiree seat on the board; however, he has resigned his position and will be unable to assume the board seat. Information regarding filling the vacancy will be shared at a later date. The term for these seats runs from Sept. 1, 2021, to Aug. 31, 2025. Board members receive no compensation for service on the board other than reimbursement for actual, necessary expenses.
During its June meeting, the State Teachers Retirement Board elected Carol Correthers as its vice chair for the coming year. According to Board Policies, Robert A. McFee, who is currently serving as vice chair, automatically moves into the position of chair. McFee and Correthers will assume their new responsibilities on Sept. 1, 2021.
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Survey Results Continue to Reflect Positive Impressions of STRS OhioMember research conducted in fall 2020 show that more than nine out of 10 retirees and eight out of 10 active members have positive overall impressions of STRS Ohio. The results are based on a random sample of 302 retired members of the system and 303 active members, giving the survey results a sampling error of no more than plus/minus 5.7 percentage points. Other findings from the survey included:
Reemployed Retiree Account Statements Available Online in SeptemberThe Annual Statement of Account as of June 30, 2021, for retired members who are reemployed, will be posted to member Online Personal Accounts in mid-September. This yearly progress report includes information pertaining to taxed and tax-deferred contributions, total accumulated retiree contributions and beneficiary information. Members who have provided STRS Ohio with an email address will receive an email in September when the statement is available for viewing.
STRS Ohio account details are always available in the online account area, where benefit recipients can also view benefit payment details, review or change banking information, review health care coverage information and costs, and update contact information. To register for an online account, click here.
STRS Ohio looks forward to the guidance these audits and studies will provide in what is expected to be the next nine to 18 months. Here is a brief description of the upcoming work:
- Asset-Liability Study -- This study is conducted by STRS Ohio’s investment consultant every five years to help determine investment risk-return expectations. It will help the board choose the asset mix for the fund and will set a reasonable investment return expectation. The board’s investment and actuarial consultants have said they expect lower than normal investment returns over the next 10 years. The study will begin this fall.
- Actuarial Experience Review -- Conducted by the system’s actuarial consultant every five years, the experience review looks at all economic and demographic assumptions the system uses and compares them to the system’s actual experience over the past five years. Economic assumptions include the return on assets, inflation rate and the rate of active members’ salary increases and payroll growth. Demographic assumptions include retirements, disability inceptions, withdrawals and mortality (the number of deaths among active members and benefit recipients). This study helps the board decide the assumptions used to evaluate the funded status. Changes to the actuarial assumptions impact STRS Ohio’s funded status. This study will begin in the fall.
- Fiduciary Audit -- The Ohio Retirement Study Council (ORSC) periodically selects an independent auditor to critically review and evaluate the organizational design, structure and practices of Ohio’s five statewide public retirement systems. STRS Ohio’s audit is expected to begin later this calendar year.
- Actuarial Audit -- The ORSC also periodically selects an actuary to provide an independent review of the work of STRS Ohio’s consulting actuary (Cheiron). This audit is expected to begin later this calendar year.
- Pension and Health Care Valuation Reports -- Cheiron produces an annual report that provides a detailed look at the financial and actuarial health of the pension and health care funds at fiscal year end. Cheiron will share the results in October, including the funded ratio and funding period for each fund. The funded ratio is, essentially, the assets on hand in the fund versus the value of the benefits expected to be paid. The funding period is a measure of how long it will take to reach a funded ratio of 100% if all future experience matches assumptions.
See the table of contents →
Retirement Board’s Virtual Meetings Recorded, Posted to System WebsiteThe State Teachers Retirement Board has met virtually since its May 2020 meeting, with meetings open to the public via a link to GoToWebinar. The link is available through the Public Meeting Notice that is posted on the system’s website. STRS Ohio posts a recording of the meeting along with the meeting presentations on the Most Recent Board Meeting Materials page in the Retirement Board section. The recordings are available early in the week following the board meeting to allow for closed captioning to be added.
See the table of contents →
Correthers, Fichtenbaum, Win Seats on Retirement BoardContributing teacher member Carol Correthers was reelected to the State Teachers Retirement Board in the 2021 election that concluded on May 3. Correthers is an intervention specialist for emotionally disturbed students for Lorain City Schools. In the contest for the two retired member seats, Rudy H. Fichtenbaum was elected to his first term on the Retirement Board. He retired from Wright State University, where he was an economics professor. Robert Stein was reelected to a retiree seat on the board; however, he has resigned his position and will be unable to assume the board seat. Information regarding filling the vacancy will be shared at a later date. The term for these seats runs from Sept. 1, 2021, to Aug. 31, 2025. Board members receive no compensation for service on the board other than reimbursement for actual, necessary expenses.
During its June meeting, the State Teachers Retirement Board elected Carol Correthers as its vice chair for the coming year. According to Board Policies, Robert A. McFee, who is currently serving as vice chair, automatically moves into the position of chair. McFee and Correthers will assume their new responsibilities on Sept. 1, 2021.
See the table of contents →
Survey Results Continue to Reflect Positive Impressions of STRS OhioMember research conducted in fall 2020 show that more than nine out of 10 retirees and eight out of 10 active members have positive overall impressions of STRS Ohio. The results are based on a random sample of 302 retired members of the system and 303 active members, giving the survey results a sampling error of no more than plus/minus 5.7 percentage points. Other findings from the survey included:
- 85% of retirees and 78% of active members agree that STRS Ohio has earned the trust and confidence of its members.
- About eight out of 10 retirees see the amount of their contributions relative to the pension benefits they receive as an excellent or good value.
- Most members report positive overall impressions of the Retirement Board.
- About 90% of active and retired members believe STRS Ohio is open and honest in its communications and believe STRS Ohio keeps them well informed about pension- and retirement-related issues.
- About 80% of active members indicate they are setting aside additional savings for retirement beyond their contributions to STRS Ohio.
- About 90% of retiree households have at least one source of income in addition to their STRS Ohio pension; 76% report having at least two additional sources of income beyond their STRS Ohio pension (investments, Social Security and spouse’s pension are the most common sources cited). On average, retirees indicate STRS Ohio provides about 60% of the total household income.
Reemployed Retiree Account Statements Available Online in SeptemberThe Annual Statement of Account as of June 30, 2021, for retired members who are reemployed, will be posted to member Online Personal Accounts in mid-September. This yearly progress report includes information pertaining to taxed and tax-deferred contributions, total accumulated retiree contributions and beneficiary information. Members who have provided STRS Ohio with an email address will receive an email in September when the statement is available for viewing.
STRS Ohio account details are always available in the online account area, where benefit recipients can also view benefit payment details, review or change banking information, review health care coverage information and costs, and update contact information. To register for an online account, click here.
OHIO RETIREMENT SYSTEMS AND THE WINDFALL ELIMINATION PROVISION
Several weeks ago, the U.S. House Committee on Ways and Means, Social Security Subcommittee held a hearing entitled, “Equity in Social Security: In Their Own Words.” The Ohio Retirement Systems (ORS) sent a letter of record for that June 15 hearing about the Social Security Windfall Elimination Provision (WEP). For those who work in a “public service” position that contributes to one of the Ohio pension systems, this provision may reduce any Social Security benefits an individual is eligible to receive. This offset currently impacts more than 148,000 Ohioans.
As the ORS letter states, “No state has felt the impact of the WEP more acutely than Ohio, which has a higher percentage of non-covered public workers than any other state … On behalf of the ORS retirees who are receiving a reduced Social Security benefit due to WEP and our active members who anticipate receiving a Social Security benefit in the future, we respectfully request the Subcommittee to enact an equitable solution.”
Collectively referred to as the ORS, the individual systems are the Highway Patrol Retirement System of Ohio, the Ohio Public Employees Retirement System, the School Employees Retirement System of Ohio, and the State Teachers Retirement System of Ohio.
As the ORS letter states, “No state has felt the impact of the WEP more acutely than Ohio, which has a higher percentage of non-covered public workers than any other state … On behalf of the ORS retirees who are receiving a reduced Social Security benefit due to WEP and our active members who anticipate receiving a Social Security benefit in the future, we respectfully request the Subcommittee to enact an equitable solution.”
Collectively referred to as the ORS, the individual systems are the Highway Patrol Retirement System of Ohio, the Ohio Public Employees Retirement System, the School Employees Retirement System of Ohio, and the State Teachers Retirement System of Ohio.
Important News from Robin Rayfield about STRS
Robin Rayfield,the Executive Director of the Ohio Retired Teachers Association (ORTA), gave a very informative talk at the April RCRTA luncheon. Robin has been very diligent about attending all STRS meetings and speaking up for the retired teachers, especially in regard to our Cost of Living Adjustment (COLA) that has been eliminated for the past several years.
According to the Ohio Revised Code, all retired teachers in the state of Ohio are to receive a 3% COLA every year. This is a state law, and for 70 years the retired teachers received this money without any problem; however, in 2017, STRS suddenly stopped paying this annual increase. Over the average time a person would be expected to receive their retirement benefits this eliminates approximately one-third of their entire benefit. ORTA strongly objected to this change, but STRS did it anyway.
ORTA is most upset about the fact that the people investing our money at STRS continue to get pay raises and large bonuses every year, regardless of how well their investments do. When one board member, Wade Steen, questioned what the benchmark was for awarding bonuses, they had no real answer. It appears that whatever the market does becomes the acceptable benchmark. At one point they invested $525,000,000 of our retirement money in a hedge fund called Panda Power, and lost every penny of it, yet still received their bonuses! Over 10 years they have lost about $3,000,000,000 of our money in poor investments, yet have continued to receive bonuses amounting to over $100,000,000! This has to stop!
STRS is supposed to do a fiduciary audit every 10 years, but they have not done one since 2006. For this reason,
ORTA has raised $75,000 to hire Edward Siedle, an expert in forensic audits of retirement systems, to do an audit of STRS. It appears they are overstating assets and reporting phony numbers in order to collect bonuses and make themselves look good. Mr. Siedle’s report will go to the Ohio Legislature.
Two retired teachers have also filed a class-action lawsuit, and if this reaches a federal court, it will likely be settled in our favor. All Ohio retired teachers are represented in this lawsuit.
Along with raising money for the forensic audit, ORTA continues to work hard to support Ohio’s retired teachers. Thanks to ORTA we have a well-funded healthcare program, and while it may not be possible to restore a 3% COLA for everyone, ORTA continues to fight for at least some type of COLA, especially for those who have been retired the longest and are receiving very low retirement benefits.
The more members ORTA has, the stronger its voice will be. ORTA represents us with STRS as well as the state legislature. It is very important that all retired teachers pay dues to ORTA every year. Dues are only $30 and can be paid to our treasurer, Mary Thomas, along with local dues, or mailed directly to the ORTA office at 250 E. Wilson Bridge Road, Suite 150, Worthington, OH 43085. Checks for ORTA should be made out to ORTA.
Robin Rayfield,the Executive Director of the Ohio Retired Teachers Association (ORTA), gave a very informative talk at the April RCRTA luncheon. Robin has been very diligent about attending all STRS meetings and speaking up for the retired teachers, especially in regard to our Cost of Living Adjustment (COLA) that has been eliminated for the past several years.
According to the Ohio Revised Code, all retired teachers in the state of Ohio are to receive a 3% COLA every year. This is a state law, and for 70 years the retired teachers received this money without any problem; however, in 2017, STRS suddenly stopped paying this annual increase. Over the average time a person would be expected to receive their retirement benefits this eliminates approximately one-third of their entire benefit. ORTA strongly objected to this change, but STRS did it anyway.
ORTA is most upset about the fact that the people investing our money at STRS continue to get pay raises and large bonuses every year, regardless of how well their investments do. When one board member, Wade Steen, questioned what the benchmark was for awarding bonuses, they had no real answer. It appears that whatever the market does becomes the acceptable benchmark. At one point they invested $525,000,000 of our retirement money in a hedge fund called Panda Power, and lost every penny of it, yet still received their bonuses! Over 10 years they have lost about $3,000,000,000 of our money in poor investments, yet have continued to receive bonuses amounting to over $100,000,000! This has to stop!
STRS is supposed to do a fiduciary audit every 10 years, but they have not done one since 2006. For this reason,
ORTA has raised $75,000 to hire Edward Siedle, an expert in forensic audits of retirement systems, to do an audit of STRS. It appears they are overstating assets and reporting phony numbers in order to collect bonuses and make themselves look good. Mr. Siedle’s report will go to the Ohio Legislature.
Two retired teachers have also filed a class-action lawsuit, and if this reaches a federal court, it will likely be settled in our favor. All Ohio retired teachers are represented in this lawsuit.
Along with raising money for the forensic audit, ORTA continues to work hard to support Ohio’s retired teachers. Thanks to ORTA we have a well-funded healthcare program, and while it may not be possible to restore a 3% COLA for everyone, ORTA continues to fight for at least some type of COLA, especially for those who have been retired the longest and are receiving very low retirement benefits.
The more members ORTA has, the stronger its voice will be. ORTA represents us with STRS as well as the state legislature. It is very important that all retired teachers pay dues to ORTA every year. Dues are only $30 and can be paid to our treasurer, Mary Thomas, along with local dues, or mailed directly to the ORTA office at 250 E. Wilson Bridge Road, Suite 150, Worthington, OH 43085. Checks for ORTA should be made out to ORTA.
