News from STRS re: HB 152

From STRS, June 15, 2007

Subject: [News] Private Vendor Legislation Impacts STRS Ohio

On April 17, 2007, House Bill 152 was introduced by Rep. Chris Widener (R-Springfield). This bill requires all K-12 employers to offer private vendor defined contribution plans to all new employees and those with less than five years of service credit. This bill is currently scheduled for a vote by the Ohio House of Representatives' Financial Institutions, Real Estate and Securities Committee on Thursday, June 21, 2007.

The State Teachers Retirement Board unanimously passed a motion on June 15, 2007, voicing its opposition to this bill. Its objections are based on the following:

• The potential to lose teachers to private vendor plans would have negative consequences on the system's funding status due to the possible loss in contributions.

• STRS Ohio already offers a Defined Contribution Plan to its new members employed at both the K-12 level and in higher education that is competitive to private vendor plans in both its investment options and its fees. We are not aware of any demand from K-12 educators or employers for additional options from private vendors.

• The addition of private vendor plans will result in an increased administrative burden and additional cost to school districts.

STRS Ohio members wishing to voice their opinion about this bill can obtain information via the following link:

http://www.house.state.oh.us/jsps/Representatives.jsp.