Submitted by WSURA STRS liaison to OCHER Richard Williams
STRS Pension Fund
The STRS Board is most concerned about being able to keep pension benefits without any reductions. For that reason the reinstatement of a COLA is not likely. The Board did approve a motion to consider changes to the plan if they do not affect the financial integrity of the system once the Funded Ratio reaches 85% (currently 77%) but even then the COLA might not be reinstated.
STRS Health Care Fund
Good News: Because the STRS Health Care Fund is currently well funded, the Board announced that STRS will continue to reimburse members $29.90/month for their Medicare premiums in calendar year 2020. The premium reimbursement was originally scheduled to be eliminated in 2020. The cost to the Health Care Fund from continuing the reimbursement for another year is $31 million.
The Board is considering the following changes to be voted on in June:
- Increasing prescription drug maximum out-of-pocket limit to $6,350 from $5,100 for the Medicare plans to align with the 2020 standard Medicare prescription plan. This increase is driven by increases negotiated with Big Pharma companies.
- Modifying the specialty drug coinsurance for Medicare enrollees — changing the specialty drug coinsurance to the lesser of 13% or $450 per 31-day period from the lower of 13% or $550 per fill.
- Adding SaveonSP manufacturer copay assistance program — the drug manufacturer pays the higher copay with a $0 balance to the enrollee so the net cost is lower for STRS Ohio.
- Adding a 24-hour nurses line for non-Medicare enrollees.
- Requiring transplants to be performed at Organ Transplant Centers of Excellence. Most transplant are already performed at these centers.
OPERS Pension Fund
OPERS investments lost money in the last calendar year so their Funded Ratio is down to 78% from 81%. The cap on the COLA for OPERS retirees is 2.5% but the actual amount that will be paid in 2020 is still to be decided. The increase must be approved by the Ohio Legislature unlike STRS where the amount of the COLA is decided by the STRS Board.
Randy Gardner, the new Chancellor of Higher Education was on the agenda for a presentation. Chancellor Gardner is a lifetime politician having served in both houses of the Ohio Legislature for many years representing the district around Bowling Green. In his presentation he stated his priorities are (1) affordability, (2) increasing funding for STEM programs, (3) making the public more aware of the relevance of higher education through university-town collaborations. In answer to a question, he said that OBR will need to address the impact of declining enrollment at many Ohio public universities but did not offer any ideas about how the problem would be addressed.
