Monthly Board Report

Funding status improves according to independent actuarial report

OP&F’s actuarial consultant presented the annual actuarial valuation at the Oct. 27 Board of Trustees meeting and results showed continued improvement to the system’s long-term funding. The funding period is now down to 25 years, an improvement from 28 years in last year’s report. The funding period estimates the amount of time it will take to pay off all unfunded liabilities. Ohio has a 30 year funding rule that retirement systems must remain below. The funding ratio increased to 71.2 percent from 69.7 percent (representing the system’s assets to its liabilities). All data in the valuation presented is from Jan. 1, 2021. Despite the improvements to long-term funding, lower capital market returns have been predicted, which OP&F must consider when looking to adjust actuarial assumptions.

Additionally, it was reported at the Board meeting that the OP&F investment portfolio reached an all-time high value at $19.03 billion as of Oct. 26, 2021. Estimated investment returns so far in 2021 are approximately 13.3 percent, above the 8.0 target return for the portfolio.

As a part of the valuation study, Cavanaugh Macdonald also studied the solvency of the OP&F Health Care Stabilization Fund. As of Jan. 1, 2021, OP&F’s health care reserves are expected to last until December 2037.

PORTFOLIO UPDATE

OP&F’s investment portfolio value:

• Current value (10/26/21): $19.0 billion
• End of September value: $18.6 billion
• End of August value: $18.9 billion

Board of Trustees Committee Notes

(Motions voted on by the Board are listed separately)

• DISABILITY: The Committee conducted its scheduled initial determination and appeal hearings.
• FINANCE: The Finance Committee reviewed the 2022 Total Plan Assets Budget. OP&F’s actuary, Cavanaugh Macdonald presented the Jan. 1, 2021 Actuarial Valuation to the Board (see above).
• INVESTMENT: Staff discussed the month-end portfolio values, significant cash movements and investment performance. OP&F consultant, Townsend, presented the Real Estate and Real Assets Performance Reviews for periods ended June 30, 2021.

Motions:

At its October 2021 meeting, the OP&F Board of Trustees approved the following motions:

• Approved Townsend’s recommended ratings for OP&F’s real estate investment managers. Motion passed by unanimous vote (Investment Committee).
• Approved staff’s and Aksia/TorreyCove’s recommendation to commit up to $10 million to GTCR Strategic Growth Fund I, L.P. Motion passed by unanimous vote (Investment Committee).
• Approved staff’s and Wilshire’s recommended rating for Dimensional Fund Advisors. Motion passed by unanimous vote (Investment Committee).
• Approved the 2022 Annual budget in the form submitted to the Board of Trustees on Oct. 27, 2021. Motion passed by unanimous vote (Full Board).
• Approved the following from the Disability Committee:
• The recommendations for five Initial Determination Hearings and two were denied.
• The recommendations for the four Death Benefit Fund cases.
• The recommendations for the five Appeal Hearings.
• Waivers for mandatory medical evaluations and future filing of annual earnings statements for the members listed.

NEXT BOARD OF TRUSTEES MEETINGS: Nov. 30-Dec. 1, 2021

Posted 11/2/2021