Dan MacDonald's report on the April 2026 STRS board meeting

From Dan MacDonald

April 25, 2026

HEALTH PLAN CHANGES COMING IN 2027

The STRS April Board meeting occurred over April 15 & 16.  On Wednesday, 3 committees met. First was the Investment Committee. The preliminary net total fund return for March was a NEGATIVE 3.7% with domestic equity –5.1% and international equity –9.4%. [The Iran war started February 28.] The preliminary net total fund return for FY 26 to date is a positive 6.9% [Remember the assumption is a total fiscal year return of minimally 7%] Total investment assets ended March at approximately $104.1 billion [February’s total investment assets were approximately $108.3 billion. You can see a little war dropped the assets about $4.2 billion.  That is billions, with a B.] As of the meeting on April 15, the assets had bounced back to approximately $107 billion.  The committee reviewed and adopted a Statement of Fund Governance, plus Defined Benefit Plan and Health Care Plan Statements of Investment Objectives. Outside consultant Meketa concurred with the statements.

Next the Governance Committee met and reviewed and approved eight Board policies: The Governance Committee Charter; Board Member Education; Board Job Description; Officers, Term of Office Duties; Actuarial Soundness; Board Self-Evaluation; Delegation to the Executive Director; Executive Director’s Job Description.

The Human Resources Committee met last. They reviewed and approved the Executive Director’s Performance Evaluation along with a Supplemental Leadership Feedback Survey. The Performance Based Incentive Policy for FY 2027 was updated [Think PBI, the Investment Department compensation package.]

At 3 p.m., the Retirement Board was called to order. March minutes were approved.  The Board reviewed the Travel and Expense Policy, which was last reviewed in 2015. The updated policy will now be sent to the Ohio Ethics Commission for review. The Saperstein & Associates Member/Retiree Survey Results were then reviewed. Saperstein did the presentation.  His company surveyed STRS members from 2006-2022. He emphasized that the 2026 results have shifted. Key Takeaway: STRS needs to rebuild trust and confidence of members since the overall number is trending lower. Saperstein stood his ground on the findings.  [If I am not mistaken, Saperstein shared that he had 360 pages of comments from the recent survey, I plan to request a copy.]  Direct feedback from a retired member: “I believe that the service staff is excellent. Counselors are wonderful and all questions are answered.  However, it is hard to understand how STRS seems to be the only organization unable to give a COLA. Ohio’s other pension systems and Social Security are able to do so.  If it is truly impossible, then STRS needs to do a much better job of explaining why.” Serious discussion followed. [A good session to review by going to strsoh.org, then under the top banner, click on “About,” then “Board Meetings” then find this video from the April meeting.]

The Board session ended with a presentation on the Defined Contribution Program. Its history, participants, the plans assets, the average account balance, and distributions in FY 2025. [If you are on the DC or CO plan, a good session to review by going to strsoh.org, then under the top banner, click on “About,” then “Board Meetings” then find this video from the April meeting.]

Thursday’s Board meeting started promptly at 9 a.m. with three actuarial companies vying to be STRS’s consultant.  Cheiron; Gabriel, Roeder, Smith & Company, and Deloitte. After the presentations, Cheiron was chosen.  Public Participation then happened. Six retirees spoke.  Three retirees addressed yesterday’s Board meeting. Particularly, the member survey findings and the Board/staff discussion of the findings. “Misunderstanding” and “Trust” were trigger words from yesterday that stirred the retirees.

Following lunch, the Retiree Health Care Plan Mitigation and Plan Design Changes were presented for calendar year 2027. Retirees are using the plans and depleting the health insurance fund which is separate from the pension fund. [Also, as you know, the federal government approved “The Big Beautiful Bill” which has altered assistance.]  Using the Sustainable Benefit Healthcare dashboard, more money needs to be placed into the fund.  The fund is trending downward.  To alter the down trend, plan designs and STRS premiums subsidies changes will be presented next month. Final determinations will be made at the June Board meeting.  Strategies being considered include “Cost savings opportunities within the plan designs and revised premium subsidies.” [Think: raising your yearly maximum out of pocket, your charge for specialist visits, your charge for Urgent Care, your charge for Emergency Room, your cost for hospital stays, your monthly premium cost. Continue thinking prescription drugs with the same line: raising maximum out of pocket, raising deductible, raising your cost of generic, preferred brand, non-preferred brand, specialty. OK, calm down.  Chair Harkness immediately blew up.  Changes will have to be made, but your Board will address next month.  April was an overview. May will be specifics. June will be the voted changes. Remember, this IS A NATIONAL ISSUE.  Your VOTE in November will determine if healthcare will be addressed or continue to be decimated for many, including health care plans downward spiral.]

The Executive Director followed with an initial review of the FY 2027 budget. He presented a 9.8% increase. His goal is to maintain operations and start some major initiatives with a deliberate shift over time from labor heavy to tech enabled. If I am not mistaken, he sees a 3-year management project. Sixty percent of FY 2027 budget is driven by compensation and benefits.  Next, he gave the Executive Director’s report sighting 7 activities such as third quarter satisfaction remains high for member services and STRS employer education staff were present at a school software conference.

During Routine Matters, 3 people were nominated for Rudy Fichtenbaum’s seat. Joan Bellner was unanimously chosen.  She will be seated for the May meeting. [I know nothing about her, nor was anything shared.  She was in audience.]

The next Board meeting will be held on Tuesday, Wednesday, May 19 and 20th.