Board Votes to Increase Mitigating Rate
Consistent with the recommendation of the board’s actuarial consultant, The Segal Company, and in accordance with Chapter 3307 of the Ohio Revised Code, the Retirement Board voted to increase the mitigating rate for STRS Ohio’s Defined Contribution (DC) and Combined (CO) Plan members by 1%. The increase will be phased in over two years beginning July 1, 2015.
The mitigating rate for DC participants will increase to 5.5% from 4.5%. The first 0.5% increase takes effect July 1, 2015, and the remaining 0.5% increase is effective July 1, 2016. For members participating in the CO Plan, effective July 1, 2015, 11.5% of their contributions will be allocated to their DC account while 1.5% will be allocated to the defined benefit (DB) portion. Effective July 1, 2016, 12% of their contributions will be allocated to their DC account and 2% will be allocated to the DB Plan.
By operation of law, the change will also increase the mitigating rate for higher education faculty who participate in an alternative retirement plan (ARP). The mitigating rate for ARP participants will be 5% effective July 1, 2015, and 5.5% effective July 1, 2016.
Since members will be contributing an additional 1% to their account beginning July 1, 2015, and another 1% beginning July 1, 2016, a 0.5% increase in the mitigating rate in each of the next two fiscal years enables STRS Ohio to increase the mitigating rate to the recommended level, while members will see a net increase in contributions to their accounts each of the next two years.
Board Reviews Changes to STRS Ohio Health Care Program for 2016
Last year, the State Teachers Retirement Board approved several changes to the health care program for 2016. These changes support the health care strategic framework adopted by the board in December 2011. During the April meeting of the Retirement Board, STRS Ohio staff reviewed implementation of these approved changes and presented additional recommendations for 2016.
Implementation of approved changes for 2016
Premium subsidy and reimbursement
Reduce the subsidy multiplier by 0.1% to 2.1% per year of service. This completes the phased-in reduction the board began in 2012. A retiree with 30 or more years of service will receive a subsidy in 2016 of 63% of the total cost of the plan.
Continue the Medicare Part B premium reimbursement at 2015 levels for eligible benefit recipients.
Aetna Medicare Plan
Reduce the in-network deductible to $150 from $300.
Out-of-network coverage changes include: increasing out-of-pocket limit to $2,500 from $2,000; increasing specialist physician office visit copayments to $55 from $50; increasing coinsurance percentage to 8% from 6%; and increasing skilled nursing/home health care coinsurance to 8% from 2%.
The webmaster is responsible for the updates.