CEM Benchmarking Report Shows STRS Ohio leads Peers with Lowest Investment Costs, Highest Five-Year Net Return
At the December meeting of the State Teachers Retirement Board, the board reviewed the results of a recent investment benchmarking study that showed the pension fund’s investments performed favorably compared to its peer group. CEM Benchmarking, a leading global research company, conducted the study that compared investment data for the five-year period ending Dec. 31, 2013, from 16 large U.S. public fund sponsors. This year’s report showed that STRS Ohio’s total investment costs were the lowest among the peer group, primarily due to STRS Ohio’s use of internal investment managers. According to the report, STRS Ohio saved about $101 million by using internal managers for about 75% of the system’s assets. The savings is based on the peer group’s median external management costs.
The report also provided performance data and showed that STRS Ohio’s five-year total net return was the best in the peer group. CEM said STRS Ohio’s strong performance was due in part to its asset mix, which has a higher weighting in U.S. stocks and a lower weighting in fixed income than the peer group. During the past five years, U.S. stocks performed well compared to other asset classes. The report also showed that STRS Ohio’s 10-year return ranked in the top quartile of the peer group.
CliftonLarsonAllen Completes 2014 Annual Financial Statement Audit
CliftonLarsonAllen reported the results of its audit of the STRS Ohio financial statements for the fiscal year ended June 30, 2014. The report declared that the system’s financial statements were fairly stated in accordance with generally accepted accounting principles; further, no material weaknesses in internal controls or instances of statutory noncompliance were found. As a result, STRS Ohio received an unqualified audit — also known as a “clean” opinion — which is the highest level of opinion that an organization can achieve.
STRS Ohio’s financial statements are included in the 2014 Comprehensive Annual Financial Report, which will be posted on the STRS Ohio website by Dec. 29, 2014. Copies of the report can also be requested by calling STRS Ohio’s Member Services Center toll-free at 1-888-227-7877. In addition to the financial statements, the report includes investment, actuarial and statistical information about STRS Ohio.
The Retirement Board approved 131 active and 217 inactive members for service retirement benefits.
Other STRS Ohio News
STRS Ohio Recognized for Funding, Administration
STRS Ohio has received the Public Pension Standards Award for Funding and Administration for 2014 from the Public Pension Coordinating Council (PPCC). The Council is a confederation of the National Association of State Retirement Administrators, the National Conference on Public Employee Retirement Systems, and the National Council on Teacher Retirement. The awards recognize public pension plans that meet key standards in several assessment areas, including actuarial, audit, investments, benefit programs and communications.
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