Laura responds to John's question

From John Curry, July 19, 2010
Subject: Re: Laura....a question

Laura,

Thank you for getting back to me on this issue. I will pass this information on to others. Our 1% contribution rate pales to all the other systems' contribution rates dedicated to health care. It is a shame it can't be raised.

John

[John's question: http://kathiebracy.blogspot.com/2010/07/lauraa-question.html]

From Laura Ecklar, July 19, 2010
Subject: RE: Laura....a question

Dear Mr. Curry,

In response to your e-mail about health care funding, the Retirement Board first looked at increases in contributions to the separate Health Care Stabilization Fund more than five years ago as a way to strengthen fund solvency. As you know, a bill was introduced, but no committee hearings were ever scheduled. In 2009, the board began developing a plan to strengthen the pension fund. While it initially hoped to provide for additional contributions to go into the health care fund as part of the proposed plan, it determined in the process that any contribution increases and other plan design changes were going to be needed solely for the pension fund. Consequently, STRS Ohio is no longer pursuing increased contributions as a solution to health care funding. However, the board’s proposed plan does preserve the current 1% employer contribution for the health care fund. As noted in a number of recent STRS Ohio communications to members, long-term changes to the STRS Ohio Health Care Program are still needed to extend the life of the Health Care Stabilization Fund beyond 2021. The board will begin looking at its options this fall as part of the development of a long-term Health Care Strategic Plan, with a scheduled completion date of February 2011.

On the Ohio Retirement Study Council Web site at www.orsc.org, there is a chart that you might find helpful. It can be found under “ORSC Reports” and is titled “Updated Comparative Summary of Systems’ Funding Plans.” This chart includes information about each system’s employer allocations to their health care funds. Thank you.

Laura Ecklar
Director, Communication Services