Big returns swell Ohio public pension funds

Big money COLUMBUS — rolled into Ohio’s five public pension systems last year with investment returns ranging from 13.8 percent to 17.36 percent easily beating

— their assumed rates of return and helping the funds bolster themselves against lousy returns in future years.

Not accounting for the recent market correction, the five systems collectively have investments worth nearly $210 billion, according to unofficial returns from the retirement funds.

Here is a look at how each system performed in 2017:

Ohio Public Employees Retirement System, 16.61 percent overall return, assets now stand at $99.56 billion.

State Teachers Retirement System of Ohio, 15.9 percent overall return, assets now stand at $78.3 billion.

Ohio Police & Fire Pension Fund, 13.82 percent overall return, assets now stand at $16.18 billion.

School Employees Retirement System, 17.36 percent overall return, assets now stand at $14.7 billion.

Ohio Highway Patrol Retirement System, 14.2 percent overall return, assets now stand at $901 million.

“We know the markets will produce a range of returns. The rally the stock markets are experiencing now helps the retirement system weather the periods when returns are low,” said Nick Treneff, spokesman for the State Teachers Retirement System of Ohio. “Our goal is to meet our assumed rate of return — 7.45 percent — over the long term. One good year alone doesn’t make up for the 2008-2009 market downturn, but it can help meet STRS Ohio’s longterm objective.”

The money is invested to benefit nearly 2 million current or former government workers and retirees and their beneficiaries.

Four of the five systems exceeded their “benchmarks” — a target return they hope to hit based on their mix of investments. Highway Patrol system director Mark Atkeson said when final audited numbers are submitted, he expects his system’s 14.2 percent return to improve and beat the 14.3 percent benchmark.

The pension funds, which invest for the long haul, have an asset mix that includes stocks, bonds, real estate, private equity and other financial instruments. Pension benefits are paid for with investment returns as well as contributions from workers and employers.

Each system pays out significant money to outside consultants and managers — collectively more than $5.7 billion in total since 2007.

OPERS: 2016 fees to external managers totaled $513.5 million; 2007 to 2016 fees totaled $2.6 billion.

STRS: 2017 fees totaled $212.2 million; 2007 to 2017 fees totaled $1.72 billion.

OPF: 2016 fees totaled $83.5 million; 2007 to 2016 fees totaled $580.3 million.

SERS: 2017 fees totaled $86.25 million; 2007 to 2017 fees totaled $809.2 million.

OHPRS: 2016 fees totaled $5.4 million; 2007 to 2016 fees totaled $48.29 million.

Six years after landmark pension reforms forced workers and retirees to pay more and accept fewer benefits, the five systems are again looking at ways to stretch their resources.

Last year, the State Teachers Retirement System of Ohio voted in April to eliminate cost of living allowances and the Ohio Police & Fire Pension Fund began restructuring the health care benefits for retirees beginning in January 2019. Contact this reporter at 614224-1624 or email Laura. Bischoff@coxinc.com.