Dan MacDonald's report on the January 27, 2022 special STRS Board meeting

From Dan MacDonald

February 4, 2022

I did not attend the January 27^th STRS Board meeting, but I did listen to it through the STRS website. I think all of you in STRS should listen to 11 minutes of the meeting. It concerns actives and you. If you go to www.strsoh.org. In the banner go to “About Us.” Under About Us go to the 2^nd column and click on Most Recent Board Meeting Materials and that will lead you to the January 2022 Board slides and the presentation. Click on the triangle for the presentations and you will have the Report from the Investment Department and the Report from the Finance Department. Click on the Finance Department. Start the presentation and toggle to 1 hour 8 minutes and listen to the last eleven minutes which features STRS’s chief actuary Brian Grinnell. This is the heart of the presentation. It lasts about 11 minutes and you’ll see a couple of slides. The Board ends up focused on Option 2 only, plus Dale Price’s hybrid request. The whole Finance Department report would be good to listen if you have 80 minutes of your time available.  

As to the overall meeting, new Board member Scott Roulston was introduced. He is the state treasurer’s appointee and replaced Yoel Mayerfeld, who often sided with Rudy Fichtenbaum and Wade Steen. The Investment Department had outside investment consultant Callan present on the preliminary asset-allocation results. Basically, it would appear there needs to be some tweaking from Mix 1, which is the current mix. Four additionally mixes were presented from most conservative, Mix 2, to most aggressive, Mix 5. The Board has requested a new mix between Mix 3 and Mix 4. Callan will present again in February and the Board is to set to finalize their asset allocation strategy in March.

The Finance Department had Cheiron, an outside actuarial consultant, on Lever Analysis.  Four lever options were presented and analyzed by both Cheiron and STRS’s own actuary, Brian Grinnell.  After the presentation and discussion, the Board focused on Option 2 – 2% one-time COLA for those eligible and change eligibility for an unreduced benefit to 35 years and eliminated the age 60 requirement in 2026. Board member Dale Price did ask for a new option that would somehow combine years of service and age. Mr. Price also asked, in regards to a COLA, what determines when something is stated to be one-time, intermittent, or permanent and the liability impact. The answer was tossed to STRS’s legal who brought up member expectation, and back to the actuary. 

The next Board meeting is February 17 and then March 17.  Although all meetings are important to actives and retirees, these two in particular WILL HAVE IMPACT. You should try to attend.