Stein, McGreevy Win Board Seats; Correthers Unopposed
Retired teacher members Robert Stein and James McGreevy were reelected to the State Teachers Retirement Board in the 2013 election. The term for these seats begins Sept. 1, 2013, and ends on Aug. 31, 2017.
Contributing member Carol Correthers was the only candidate to file enough petitions for her seat; therefore, by statute, no election needs to be held. Correthers will continue in this seat through Aug. 31, 2017.
Board Approves STRS Ohio Health Care Program Changes; Defers Planned Reduction in Health Care Subsidy Level
At the March 2013 Retirement Board meeting, STRS Ohio Member Benefits staff presented several options to consider for 2014 plan changes designed to extend the life of the Health Care Fund. At its May meeting, the Retirement Board took action that will affect STRS Ohio Health Care Program enrollees. Below is a summary of the actions taken by the board. Further details on these changes will be included in upcoming newsletters and open-enrollment materials.
Board Actions Taken for 2014 Plan Year
•Delay for one year the planned 0.1% reduction in the subsidy multiplier — The multiplier will remain at 2.3% per year of service for 2014; so, a retiree with 30 or more years of service will continue to receive a subsidy of 69% of the total cost of the plan for one more year. The board action means the next two steps to ultimately reduce the multiplier to 2.1% will take place in 2015 and 2016.
•Reduce the prescription drug maximum annual expense by $200 — This reduction in members’ maximum annual expense with Express Scripts (to $4,550 from $4,750) is consistent with Medicare changes.
•Eliminate the late enrollment with a 90-day waiting period option — Beginning in 2014, members will no longer have the option to enroll in the health care program (medical, dental and vision) outside of the annual open-enrollment period (except for certain qualifying events).
•Allow families with both Medicare and non-Medicare enrollees to enroll individually into Medical Mutual and Aetna — Beginning in 2014, Medicare-eligible individuals will be able to choose the Aetna Medicare Plan, while the other non-Medicare covered family members remain in a Medical Mutual Plus or Basic Plan. Family deductibles for all plans (Medical Mutual, Kaiser and Paramount) will be eliminated, but individual deductibles will remain.
•Increase hospital emergency room copayments — The copayments will increase to:
(a)$150 for Medical Mutual plans, AultCare, Kaiser and Paramount non-Medicare plans; and
(b)$65 for Medicare plans administered by Aetna and AultCare, Kaiser and Paramount.
•Continue the Health Care Assistance Program at 2013 coverage levels and $0 premiums — Details on this program will be included in the 2014 health care open-enrollment materials.
•Continue Medicare Part B reimbursement at 2013 levels — Details on the reimbursement levels will be included in the 2014 health care open-enrollment materials.
Future Changes to the Health Care Program
The board also voted on two changes to the health care program that will take effect in the future:
•Merge the Medical Mutual Basic and Plus Plans into one plan in 2016 — Deductibles and coinsurance out-of-pocket limits for both plans will increase.
•Increase years of service for health care eligibility for members who retire in 2023 or later — Members who retire in August 2023 or later will need 20 years of qualifying service to be eligible to enroll in the STRS Ohio Health Care Program. These members will also need 35 years of qualifying service to be eligible to receive the maximum subsidy toward their monthly premium, and the years-of-service multiplier will be reduced to 1.9%. These changes align with the increasing age and service requirements for retirement included in pension reform legislation (Sub. S.B. 342). Members who retire before August 2023 will remain eligible for health care coverage under the years-of-service health care requirements in effect at retirement, with a years-of-service multiplier of 2.1%.
The Retirement Board approved 114 active members and 89 inactive members for retirement.
Other STRS Ohio News
Segal Transition Under Way
STRS Ohio and The Segal Company have agreed on a five-year contract for actuarial consulting services. Segal replaces PricewaterhouseCoopers, whose contract expired on March 31. The board selected Segal from four firms competing for the new contract, noting that the firm offers expertise in a number of areas, including pension liability analysis, health care plan design and a broad understanding of national trends in the public and private sectors. The contract with Segal extends through March 31, 2018.
STRS Ohio Co-Hosts CEM Benchmarking’s Annual World Pension Administration Peer Conference
STRS Ohio, the School Employees Retirement System of Ohio and the Ohio Public Employees Retirement System served as co-hosts for CEM’s 2013 pension administration conference May 7–9 that was attended by more than 130 representatives from 51 pension funds, including funds from the United States, Canada, the United Kingdom, the Netherlands and the United Arab Emirates. The purpose of the annual conference is to share ideas, knowledge and best practices in pension administration and to provide a forum to network with other systems.
Attendees toured STRS Ohio’s Member Benefits area on May 7, and staff’s presentation included demonstrations on the Call Center’s “virtual hold” callback system, the enhanced TeleConference session using LiveLook, and STRS Ohio’s online service retirement application. CEM recently reported that STRS Ohio’s service level score for 2012 was the second highest score in its peer group, while the system reduced its overall costs per member/annuitant.
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