2010 Healthcare Premiums

The tables below are unofficial postings but are based on action taken by the STRS Board at their June, 2009, meeting. Some premiums were increased and some were decreased based on an evaluation of the "risk pool," claims experience, and other cost factors. These rates take effect January 1, 2010. To see a larger view, just double-click the image. STRS plans to publish official tables on its website by June 26.

Medical Mutual is now the sole provider for members who have not reached Medicare eligibility, although it was noted that if this coverage was not feasible due to limited physician networks or other issues, alternate arrangements will be made for those members.

The Aetna Medicare Advantage plan is now the default coverage for Medicare-eligible retirees, although you may "opt out" to a conventional plan if you prefer.

If you have any questions call the STRS Ohio Member Services Center toll-free at 1-888-227-7877.



The following chart includes the premiums that would have been charged for the Medical Mutual Plus Plan for illustrative purposes only. That option is no longer open to members with Medicare A & B coverage. The only option for most members will be a choice of the Aetna Medicare Advantage Plan or the Medical Mutual Basic Plan. However, members with Medicare A only, Medicare B only, non-USA residents, and families with some Medicare-eligible and some Medicare-ineligible members may still access the Medical Mutual Plus Plan. Members who live in the Toledo, Cleveland, or Canton service areas can still access the fully insured plans offered by Paramount, Kaiser, and Aultcare, respectively. Confused? Call the STRS Member Service Center (1-888-227-7877).

Dr. Stephen Buser address to the STRS Ohio Board

Former STRS Ohio Board member and professor of finance at Ohio State University address on November 20.

To Members of the STRS Board:

I am speaking to you today in the hope that you will relay my deep felt thanks to Steve Mitchell and members of his investment team at STRS who continue to add considerable value to the STRS fund despite increasingly difficult economic times

The fiscal year ending June of 2008 was a challenge for investments in general. Financial markets declined across the board, and STRS investments suffered as well. Financial conditions for the second half of 2008 are proving to be even more difficult.

So why am I happy? I am happy because despite all the bad news, STRS could be worse off. Some might say STRS should be worse off. And even I agree that STRS would be worse off, if not for the remarkable performance of Steve Mitchell and his investment team.

To understand the paradox of good performance in a bad year, it is essential to understand that it is the STRS Board, all of you, who are responsible for general asset allocation. When I served on the Board, I was supposedly an investment expert, and the allocation of STRS assets was one of the issues that kept me awake nights. In effect, the Board chooses a game plan when it decides how many eggs to place in each of the various investment baskets. The general economy then determines whether conditions will be favorable or unfavorable for a given given plan. Despite the bad outcome for this year and probably for the next year as well, I approved of the current asset allocation strategy when I served on the Board, and I continue to approve now. It is a game plan that will win in most years. Unfortunately, no strategy will win in all years. That is what risk and return are all about. Little risk means little expected return. So if we want and need the STRS fund to grow, we must be willing to take some risks.

But if the STRS investment team does not choose the game plan, and if it cannot control the economic environment, how are we to measure performance? With the assistance of objective outside consultants, we measure the performance of the STRS investment team by comparing their results to formal benchmarks that reflect the corresponding performance of all other managers with similar assignments. In effect, STRS grades on the curve. Whether a given test turns out to be hard or easy, it is relative performance, not absolute performance, that determines final grades for the STRS investment team.

It is these relative results for the STRS investment team that I wish to focus on. I was pleased and even astounded to discover that despite the difficult economic times, STRS outperformed its benchmarks in most areas and produced combined relative value in excess of $200 million. I want to say that again. As a direct result of the exceptional effort and success of Steve Mitchell and his investment team, STRS ended the fiscal year with $200 million more dollars than it would have had if investment results had only matched the results for average professional money managers, who typically earn much higher salaries than STRS offers.

To put this savings for STRS in context, I note that the STRS investment team managed to save the equivalent of roughly equal to two years of the entire budget of all aspects of STRS operations. In effect, we all got two years of free service from STRS.

In exchange for such remarkable savings, and to encourage such efforts in the future, the STRS Board offers an incentive package that rewards relative performance As a former Board member and a continuing retired member of STRS, I strongly approve of the STRS bonus program, and I urge all members of STRS to join me in supporting this program. More generally, whenever you read that one or more members of the STRS investment team has earned a bonus for exceptional relative performance, please do not assume that STRS is taking money out of the pot for STRS members. Instead understand that many, many times the amount of such bonus are going into the pot for us as members.

So in conclusion, let me say thank you Board members. Thank you Steve Mitchell, and thank you valued members of the STRS investment team.

 

FY2008 STRS Investment Performance

Below are figures for Ohio STRS investments for fiscal year 2008 for each general asset class. It was a particularly difficult year for domestic equities. The benchmark figures are the standard against which STRS investment staff is evaluated and part of the calculation for investment staff incentive bonuses.

LIQUIDITY RESERVES
STRS Ohio Return: +3.97%
Benchmark Return: +2.90%
Relative Return: +1.07%

FIXED INCOME
STRS Ohio Return: +6.82%
Benchmark Return: +6.22%
Relative Return: +0.60%

DOMESTIC EQUITIES
STRS Ohio Return: -15.60%
Benchmark Return: -12.69%
Relative Return: -2.91%

INTERNATIONAL
STRS Ohio Return: -9.10%
Benchmark Return: -10.00%
Relative Return: +0.90%

REAL ESTATE
STRS Ohio Return: +18.92%
Benchmark Return: +5.50%
Relative Return: +13.42%

ALTERNATIVE INVESTMENTS
STRS Ohio Return: +9.34%
Benchmark Return: +9.34%*
Relative Return: 0.00%

TOTAL FUND
STRS Ohio Return: -5.44%
Benchmark Return: -5.79%
Relative Return: +0.35%

Less Costs to Arrive at Net of Fees: -0.11% Total Fund, Net of Fees: +0.24%

*No benchmark exists for this asset category; actual returns are used.

STRS Board Sets 2009 Health Care Premiums

Below are charts that contain the new Health Care insurance premiums for plans offered by STRS. They were adopted at the June 19, 2008, STRS Board Meeting and will go into effect on January 1, 2009.

The information on these charts was provided on documents distributed at the Board meeting but should not be considered "official." Only STRS can issue official insurance premium rate quotes. The enrollment period for these plans will be this November.

STRS Self-Insured Plans

Fully Insured Plans

Express Scripts: Key Dates in the Transition

Ohio's public employee pensions in good shape, study sayOhio's public employee pensions in good shape, study says

Wednesday, December 19, 2007
Stephen Koff
Cleveland Plain Dealer Bureau Chief
Washington- Unlike some counterparts in private industry, Ohio's teachers, highway patrol officers and other public employees need not worry about their pensions being solvent, according to a new study.
"Ohio has done a very good job keeping up with required contributions for its public employee pension system," said the 50-state study released Tuesday by the Pew Center on the States.
The total coming due for Ohio public pensions over the next 30 years is $139 billion, according to Pew, part of the nonpartisan, nonprofit Pew Charitable Trusts, which studies issues ranging from the environment to good government. Of that, Ohio has 81 percent set aside, and pension investments were assumed by the state to be earning an 8 percent return in 2006, the year studied.
Most experts consider a pension fund healthy if it has at least 80 percent of funds set aside that it will need. Twenty states, including Kentucky, Indiana and Oklahoma, have less than 80 percent set aside.
Ohio may have to make adjustments to meet future health-care costs for state retirees. Over the next 30 years, the state will have an estimated $32 billion in retiree health care and related costs. The pension fund only has 35 percent of that $32 million set aside, but Ohio is in better shape than most. The vast majority of states have put aside an average of 3 percent of future health costs, the Pew study found.
Ohio lawmakers are considering options ranging from higher employee contributions to setting a higher age at which some teachers could collect retirement benefits.
"None of the pensions are in any trouble," said Aristotle Hutras, director of the Ohio Retirement Study Council, an independent oversight body. "Now they are working very hard to continue that very important retiree health-care benefit."