Historical Analysis

Highlights of Ohio STRS assets, liabilities, and other important funding metrics over the last two decades.

Funding Status

The funded ratio is calculated by dividing the value of plan assets by liabilities. When “Actuarial Value” is selected the actuarially smoothed assets are used. When “Market Value” is selected the market value of those assets are used. The difference between plan assets and liabilities is the unfunded accrued liability (UAL). Again, when “Actuarial Value” is selected the actuarially smoothed assets are used. When “Market Value” is selected the market value of those assets are used.

Unfunded Accrued Liability (Actuarial Value)Funded Ratio (Actuarial Value)$0.0$10 B$20 B$30 B$40 B$50 B0%20%40%60%80%100%200220042006200820102012201420162018202020222023

This chart also shows the difference between plan assets and liabilities–looking at the difference between those assets and liabilities (UAL).When “Actuarial Value” is selected the actuarially smoothed assets are used. When “Market Value” is selected the market value of those assets are used.

Actuarial Accrued Liability(Actuarial) Value of Assets$0.0$20 B$40 B$60 B$80 B$100 B200220042006200820102012201420162018202020222023

Pension Debt Drivers

What is driving STRS Debt? (2001 to 2022)

$0 B$10 B$20 B$30 B$40 B
Negative Amortization
Changes to Actuarial Methods & Assumptions
Investment Performance
Deviations from Demographic Assumptions
Benefit Changes
Net Change to Unfunded Liability
  • Negative Amortization has resulted in interest on STRS debt exceeding the actual debt payments (negative amortization), adding $14.48 billion in unfunded liabilities.
  • Changes to Actuarial Methods & Assumptions revealed $11.92 billion in previously unrecognized unfunded liabilities.
  • Investment Performance below assumption has added $8.83 billion to unfunded liabilities.
  • Deviations from Demographics Assumptions exposed $5.85 billion in additional unfunded liabilities due to demographic experience not meeting expectations.
  • Other unclassified changes to STRS over the last several decades have added $0.45 billion in unfunded liabilities.
  • Benefit Changes reduced unfunded liabilities by $-25.72 billion.
  • Net Change, from 2001 to 2022, unfunded liabilities increased by $15.8 billion.

Unpaid Interest

Unfunded Liabilities from Other SourcesUnpaid Interest on Unfunded Liabilities$0.0$10 B$20 B$30 B$40 B 200220042006200820102012201420162018202020222023

Amortization Payments

Amortization ContributionsInterest on DebtNet Amortization2001200220032004200520062007200820092010201120122013201420152016201720182019202020212022−$4 B−$2 B$0$2 B$4 B

Assets & Returns

Investment Returns

The chart below compares assumed returns with market, actuarial, and geometric rolling returns.

Market ReturnAssumed Return5-Year Geometric Rolling Return−20%−10%0%10%20%20022004200620082010201220142016201820202022

Asset Allocation

  • Fixed Income: Government securities, corporate bonds, mortgage-backed securities, asset backed securities, etc.
  • Public Equities: Publicly reported and traded stocks.
  • Private Equity: Investments in funds managed by private firms such as Blackrock, StateStreet, and The Vanguard Group.
  • Other Alternatives: Hedge funds, commodities, and other investments.
  • Real Estate: Investments in REITs and other real estate funds.
  • Cash: Cash and cash equivalents.
0%20%40%60%80%100% 200220042006200820102012201420162018202020222023 undefined

Return Probability

The boxes below represent the probability that STRS will hit a given assumed rate of return based on 10,000 simulations of various capital market assumptions, in addition to plan assumptions and historical data.

BlackRock: 60%
Plan Assumptions: 51%
Horizon20: 47%
Historical: 40%
Horizon10: 36%
BNY Mellon: 25%
JP Morgan: 20%
Research Affiliates: 18%
−2%0%2%4%6%8%10%12%14%16%% change BlackRockPlan AssumptionsHorizon20HistoricalHorizon10BNY MellonJP MorganResearch Affiliates7%