February Board News
Lynn Hoover to Continue as Acting Executive Director
State Teachers Retirement Board Chair Dale Price released the following statement during the board’s February meeting:
The State Teachers Retirement Board has reviewed the executive summary of a report from the Ohio Attorney General’s Office regarding an investigation of STRS Ohio Executive Director Bill Neville.
As a result, the board approved the following three motions:
- Chief Financial Officer Lynn Hoover will continue as acting executive director.
- Mr. Neville will continue on paid administrative leave through Friday, May 17.
- The board will contract with a third party at its March meeting to provide professional development for Mr. Neville.
The professional development for Mr. Neville is tentatively scheduled to run through mid-May, at which time the board will determine his status with the organization.
STRS Ohio will continue its unwavering focus on Ohio’s public educators and their families to protect their financial security. As acting executive director, Ms. Hoover and the exceptional team at STRS Ohio are protecting the stability and integrity of the organization on behalf of all constituents and personnel. Daily operations are being maintained as usual for the pension fund’s 530,000 retirees, active and inactive members.
Employer Contribution Rate Increase Effort Planned
Acting Executive Director Lynn Hoover and Governmental Relations Director Marla Bump provided the board with an update focused on STRS Ohio’s upcoming effort to increase the employer contribution rate. The STRS Ohio team has been meeting with legislators and stakeholder groups to generate support for this initiative. Bump said a bill may be introduced in the Legislature as early as April. More details on the efforts to pursue an employer rate increase and how you can help will be available soon. STRS Ohio looks forward to partnering with our members on this important endeavor.
Pension Fund Comparison Shows no Two Plans Alike
STRS Ohio Chief Actuary Brian Grinnell shared his comparison of STRS Ohio with a handful of other teacher pension systems. The analysis included benefits, contribution rates and the level of risk for each plan. His key observations include:
- The most stable and well-funded plans have variable employer contribution rates (STRS Ohio has a fixed contribution rate from employers of 14%).
- While there are different approaches to cost-of-living adjustments, no plans provide full inflation protection.
- Most pension funds have tiered benefit structures — different benefits for those joining the systems at different times (STRS Ohio does not).
- Pension funds that responded to market downturns in a robust and timely manner fared better. All systems reviewed made benefit and/or contribution changes as a result of the market downturns.
- Demographics and history matter — plans that were well funded in the year 2000 tend to be well funded now with fewer changes in benefits along the way.
Board Reviews Economic Assumptions
The Retirement Board’s actuarial consultant, Cheiron, presented its annual review of the economic assumptions for both the pension fund and the health care fund. This includes the discount rate, inflation, salary scale and payroll growth assumptions. Cheiron shared its opinion on the rationality of the assumptions as they are used to measure STRS Ohio’s long-term liabilities. No changes were recommended as part of this year’s review. The discount rate, also used as the expected rate of investment return, remains at 7%.
Welcome to Brian Perera
Governor Mike DeWine has appointed Brian Perera to the State Teachers Retirement Board. Perera served as the Ohio Senate Finance Director for more than 20 years and also served as a lobbyist for The Ohio State University. He is currently a senior policy advisor for Zaino Hall & Farrin LLC. Perera earned a B.A. in Political Science from The Ohio State University.
Retirements Approved
The Retirement Board approved 202 active members and 151 inactive members for service retirement benefits.