Retirement Board Takes Action to Improve Pension Funding
At the March meeting of the State Teachers Retirement Board, the board took action to reduce the amortization period for the pension fund, voting unanimously to discontinue the current allocation to the Health Care Fund of 1% of the 14% employer contribution beginning July 1, 2014. This decision follows discussion that began at the Board Retreat in January and continued at subsequent board meetings. The Segal Company, STRS Ohio’s actuarial consultant, projects this change, coupled with smoothed gains from strong investment returns, will result in an amortization period of about 32 years. That puts STRS Ohio on track to reach a 30-year amortization period by 2016 — the time frame that was projected when pension reform legislation was passed in 2012. Ohio retirement systems are required by law to amortize unfunded liabilities over a period of not more than 30 years or to submit a board-approved plan to the Ohio Legislature to reduce the funding period to 30 years. STRS Ohio’s July 1, 2013, valuation showed an amortization period of 40.2 years.
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