The Monthly Administrative Expense Reports contain information about SERS’ day-to-day operating expenses and is provided in both summary and detail formats.

SERS is committed to financial transparency. Because we are dedicated to providing easy access to public records, SERS posts monthly administrative expenses and those of the previous fiscal year. The Board reviews these checkbook expenditures every month. If you have questions about these reports or the information contained within them, please contact Tim Barbour, senior manager – external communications, by email at tbarbour@ohsers.org.

The Annual Comprehensive Financial Report contains detailed information about SERS’ financial operations, including our stewardship of the funds entrusted to us, and our compliance with all of the legal requirements placed on us by the state. The Annual Comprehensive Financial Report details major initiatives and highlights, investments, and funding for the period from July 1 to June 30.

The Summary Annual Financial Report (SAFR) is an overview of the financial health, investment performance, demographics, and key accomplishments of the last fiscal year. All of the financial information summarized in this publication can be found in more detail in our Annual Financial Report.

The Monthly Investment Report is provided to SERS’ Retirement Board at every Board meeting. It contains a snapshot of the System’s investments for the month ending two months before the Board meeting.

Will SERS be able to keep its pension promises to members in 20, 25 or 30 years? That’s what the Actuarial Report determines based on SERS’ current assets and liabilities.

The Annual Health Care Report provides a full accounting of the revenues and costs relating to the provision of health care under sections 3309.375 and 3309.69 of the Ohio Revised Code.

The Annual Health Care Valuation examines present and prospective assets and liabilities of the health care fund, as required by Governmental Accounting Standards Board (GASB) Statement No. 45.

WHAT THE LDROM IS

The Actuarial Standards Board (ASB) has revised the Actuarial Standards of Practice No. 4 (ASOP 4) to include a new Low-Default-Risk Obligation Measure (LDROM) calculation.

Public pension plans are now required to disclose the LDROM calculation, which represents what the funding liability would be if a pension plan invested its assets solely in high-quality bonds whose cashflows approximate future benefit payments. It does not take into account a diversified portfolio that not only includes stocks and bonds, but also assets that can generate higher returns, such as real estate and private equity.

In short, the LDROM demonstrates the expected savings to be achieved by investing in assets with higher expected returns other than bonds.

WHAT THE LDROM IS NOT

The LDROM is NOT a true measure of the System’s pension liability or the health of the plan.

While SERS is required to disclose it, the LDROM has limited practicality for measuring public pension plans. Assessments of a fund’s financial health rely on multiple measures, not one volatile measurement based on low default risk bonds.

For instance, SERS’ assumed rate of return is 7%. This is the annual investment return SERS’ actuaries expect the System to realize on its investments over a 5-, 10-, or 20-year period. If the System only invested in high quality bonds, the rate of return would be closer to the Treasury yield, which is much lower than 7%.

SERS’ assumed rate of return is higher than what it would be if using the LDROM calculation because the System’s assets are diversified among many types of investments. When the LDROM is compared with SERS’ actual returns, the difference illustrates the value of SERS’ diversified investments and expertise of our investment staff in assembling and maintaining a diversified portfolio.

“REASONABLE” ACTUARIALLY DETERMINED CONTRIBUTION RATE

In addition, ASOP 4 requires pension plans to comment on a “reasonable” actuarially determined contribution rate.  SERS already discloses this percentage in its Annual Basic Benefits Actuarial Valuation. Anything over the actuarially determined contribution rate goes directly toward paying down the System’s liabilities.

SERS’ actuarially determined contribution rate for 2023 was 10.57%, which is more than 3% lower than its employer contribution rate of 14%.

Moreover, in 2015, the SERS Board approved a change to the funding policy, which only allows a portion of the employers’ contribution to be directed to the Health Care Fund if the System is more than 70% funded.

While SERS is currently 76.6% funded, and has been more than 70% funded since FY2017, it has directed all of the employer contribution to the pension fund since FY2019.

SERS is adequately funded due in large part to its diversified portfolio of investments, its funding policy, and the System’s commitment to sustainability.