Dan MacDonald's report on the May 20, 2026 STRS board meeting

From Dan MacDonald

May 23, 2026

STRS Health Care Will Cost You More in 2027!

Due to recent hospitalization and surgery, I was unable to personally attend the STRS May Board meeting in Columbus, but I did not miss a minute virtually.

On May 20, the May STRS gathering began at 10:40 a.m. with the audit committee. A new chair was elected, Elizabeth Jones. The governance committee then met an elected new chair, Pat Davidson. [Both chairs replaced Michael Harkness, now the STRS Board chair.]

The governance committee continued its review of the Board Policy documents and addressed and accepted eight policies: the Executive Director Evaluation [rescinded]; Monitoring Executive Performance [removed chart]; then Operational Financial Planning, Operational Financial Condition, Operational Asset Protection, Investment Asset Protection, and Business Continuity Planning [These were reworded to be more positively instead of negatively written] and added a Service Provider Referral Policy [Think 2022 Funston audit recommendation]. From the Funston 2022 audit, 137 recommendations have been addressed; 4 more addressed above, 20 still to be addressed and 15 STRS is not in agreement.

The investment committee then met. April’s net investment returns were a positive 4.2 percent. The preliminary net total return for the fiscal year [FY] to date is a positive 11.5 percent [Think Board goal return of 7% each FY; therefore, higher is better]. Total investment assets ended April approximately $108.3 [Back to where it was near the end of February; think Iran war.]

In FY 2026, the fund is up $7.7 billion. Fourteen financial slides were then presented to help Board members interpret the financial information that is presented monthly in something called “The Grey Book.” The new presentation of investment financials was requested by the Board and presented as a step forward. The intricacies of monthly rebalancing the asset classes followed with scenarios.

Outside consultant Maketa commented support to the investment department changes and fund recovery. Board member Elizabeth Jones probed the upcoming SpaceX public offering [$1.75 trillion, Elon Musk] and STRS’s interest.  [Take a moment and watch this portion of the meeting at strsoh.org under the banner “About” then Board meetings. There will be 2 stock classes and some unique terms that “raise eyebrows.” If I am not mistaken the department is considering a $10 million investment.]

The legislative committee met and elected new chair Chad Smith. The Human Resource Committee then approved the 2027 Performance Based Incentive policy. Davidson pointed out that over the past 5 years, the PBI paid $38 million incentive money, receiving a value added of $2.1 billion to the fund.

The actual Board meeting was called to order at 12:11 p.m. April's Board minutes were approved. New retiree Board member Joan Bellner from Reynoldsburg was introduced [Fichtenbaum’s replacement].

Public Participation had 8 speakers, all retirees. Robert Buerkle out of Cincinnati and one of the two retired teachers who filed a class action lawsuit against STRS, presented a new flow chart to the Board showing 4 ways STRS is receiving income to the fund: active teacher contributions, employer contributions, investment earnings, and he added a 3% recycling pump from retirees. Money that never leaves the fund but just gets recycled because of lack of payout. [A very insightful gentleman.]

After lunch, Marla Bump, the STRS Director of Government Relations, was recognized on her retirement with 25 years of STRS service [Think STRS lobbyist].

Health care was then addressed. There are 95,269 retirees [does not include beneficiaries] enrolled in the STRS Health Care program; 45,813 retirees not enrolled. The plan can be altered in four ways: its eligibility, its design; its administration, its subsidies. This past year the plan had high claims experience leading to suggested non-Medicare subsidy reduction from 2.5 to 2.47 for up to 30 years of service with changes to medical deductible from $2,500 to $3,000 [this was voted down by Board 6-4; no increase will happen] and RX changes in Tier 2-4 increases plus deductible $275 to $375. For Medicare: subsidy reduction from 2.2 to 2.1 for up to 30 years of service with no changes to medical but RX changes in Tier 2-4 increases plus deductible $275 to $375. These changes were approved. Next month, medical premium increases will be presented and voted. [Changes/increases should be expected for the next 5 years unless the plans have less usage and/or health care at the national level is not used as a political weapon. My comment, not Board’s]

Executive Director Toole then presented an amended FY 2027 budget. The Ohio Retirement Study Council was unhappy with the original 9.8% STRS FY 2027 Budget increase. The new budget shows a 6.2% increase which the Board approved. [Take a moment and watch this portion of the meeting at strsoh.org under the banner “About” then Board meetings.] One Board member told Toole that next year’s FY 2028 budget should be well under the 6.2% increase while other Board members claimed that they were too lenient last year in their approval of FY 2026 budget. [In my thoughts, the Board members are kowtowing to ORSC and the state legislators. Yes, the Board members are protecting the STRS Board composition and its Executive Director, which is a good thing. I objected during Public Participation last month to the FY 2027 budget increase, but our Board should have challenged it; instead, ORSC effectuated the decrease. These are my ponderings.]

Outside consultant CEM Benchmarking presented on STRS services to its members which were rated excellent while having lower costs than its peers.

The Executive Director then commented on 7 areas to include the FY 2026 operating budget which is $6,690,500 UNDER BUDGET. [Think allocated, but not spent and still in fund]

Routine Matters followed by New/Old Business. Davidson suggested to the STRS staff to hold health plan premium increases to 10% or less. The meeting adjourned without further comments.

The next STRS Board meeting is scheduled for June 24-26, 2026.