Thoughtful governance, well thought-out policies, and strong partnerships mean better outcomes for STRS beneficiaries.
Pension solvency is the result of building alliances with over a dozen constituency groups.
Improved internal processes gained STRS more effective enterprise risk management, better staff development, flat budgets, and improved investments.
By third-party measures, the current board has a very high level of policy effectiveness.
Bob has worked with this board to:
• Design a pension reform plan that moved the fund from actuarially unsustainable to 70% funded while avoiding state actions that unnecessarily punished retirees in other states. STRS coordinated constituency groups to achieve passage of the necessary legislation in a less-than-friendly political environment.
• Broaden the STRS Ohio investment toolbox to improve investment returns. STRS Ohio now has one of the highest 5-year risk-adjusted investment returns of any major North American pension plan.
• Focus on improved systems to better identify, measure, and manage risks across the entire enterprise. STRS Ohio has become a leader in these areas.
• Improve governance practices and efficiency through staff leadership development, succession planning, and board member education.
• Oversee efficiencies and improvements that have STRS member services ranked #1 world wide. Costs are declining for STRS while the global average cost is rising. (re: CEM Benchmarking and others)
• Develop an actuarially sound long-term funding policy. STRS policy contains an annual dashboard that includes innovative economic environment metrics. These will help future boards avoid poor decisions anchored to emotional reactions to business cycle events. Such anchoring is a persistent problem in the creation of all human policy. STRS was a pioneer in addressing this risk in funding policy in the pension world. This practice is extremely valuable and is being adopted by others. (re: Callan Assoc., Segal Actuarial, International Monetary Fund, and others)
• Complete three investment policy and actuarial experience reviews.
This Board will continue the above -- as well as:
• Assuring a health care program that maintains the STRS Health Care Stabilization Fund as a continuing resource to reduce retiree health care costs.
• Causing STRS to more efficiently communicate and work with stakeholder groups and other Ohio pension systems to encourage legislative policies that benefit STRS and other Ohio public retirees. Efficient constituent education and communication is critical in an unstable political environment.
• Pursuing continued improvements in the investment toolbox. We can always do better. About 80% of benefits payments are the result of investment returns. The average retiree recovers 100% of their payroll contributions in their first three years of retirement -- the rest of their pension is funded by investments.