STRS: Report on January 2013 Board meeting

From STRS, Jan. 18, 2013

January Board News

2012 Member Survey Results Presented

Results of membership surveys conducted in December 2012 show that more than 90% of STRS Ohio members continue to have positive overall impressions of STRS Ohio and most still consider their pension an excellent or good value.

These were just a sample of the findings from the annual membership surveys presented by Dr. Marty Saperstein at the board's January 2013 meeting. Dr. Saperstein's Columbus-based research firm, Saperstein Associates, conducted interviews with 602 randomly selected participants (301 active members and 301 retirees). The surveys averaged about 15 minutes in length.

This year's results also showed the following:

• About half of the active members surveyed indicated they plan to teach longer than they originally thought, and the most common reason cited for this was pension reform legislation.

• A majority of active and retired members have positive overall impressions of the Retirement Board.

• Compared with last year, more retirees feel the pension system is financially sound, but fewer actives feel that way.

• Most members are satisfied with system communications, including email updates. More than half of retirees and two out of three active members have visited the STRS Ohio website.

• 95% of the retiree households have at least one source of income in addition to STRS Ohio. On average, STRS Ohio provides 58% of retirees' income.

Retirements Approved

The Retirement Board approved 183 active members and 340 inactive members for service retirement benefits.

Other STRS Ohio News

STRS Ohio Meets with Constituents to Discuss Defined Contribution and Alternative Retirement Plan Mitigating Rate

At STRS Ohio's request, PricewaterhouseCoopers (PwC) completed a study of the portion of employer contributions necessary to mitigate negative financial impact from offering a defined contribution plan (based on Section 3307.84, Revised Code). This calculation is called the "mitigating rate." Using three different approaches, PwC has recommended a mitigating rate range from 4.85% to 12.57% for the 2013–14 fiscal year. Separately, the Ohio Retirement Study Council has asked its actuarial consultant, Milliman, to calculate the mitigating rate for alternative retirement plan participants.

In December and January, STRS Ohio staff met with the Healthcare and Pension Advocates for STRS (HPA) and the Inter-University Council of Ohio's (IUC) Human Resources Committee to talk about the mitigating rate and its impact on the retirement system's unfunded liability. The groups recognized that STRS Ohio has to reduce the unfunded liability, but the IUC committee requested more information. Staff will continue discussions with these groups.

Enrollment Remains Essentially Unchanged in STRS Ohio Health Care Plans

Following a successful open-enrollment period in November, the STRS Ohio Health Care Program started the new year with essentially the same enrollment levels as before open enrollment. More than 8,300 plan changes were recorded between December 2012 and January 2013. Total enrollment in the STRS Ohio Health Care Program as of Jan 1, 2013, stands at 125,418. The largest number of plan participants are enrolled in the Aetna Medicare PPO (and ESA PPO) plans, with a total of 76,545 enrollees.

Call Center Surveys Reflect High Satisfaction Ratings

Nearly 9,000 callers to the Member Services Center during the first half of the fiscal year chose to remain on the phone and complete a satisfaction survey. More than 96% of the respondents stated they were satisfied or better with their experience, while 82% stated they were extremely pleased with the service. Call volume is up about 5% for the first six months of the fiscal year compared to last year. The average wait time for the preceding 12-month period decreased to 20 seconds compared to 29 seconds last December.

STRS Ohio Receives Actuarial Consulting Proposals

Seven firms, including PricewaterhouseCoopers (PwC), have submitted proposals to provide actuarial consulting services when the current contract with PwC expires in March. Staff anticipates that finalists will make presentations to the board at the time of its March meeting.