A lady with a novel idea.....have the BANK handle those investments!

From Monica Oclander, November 12, 2008
To: mitchels@strsoh.org; board@strsoh.org; nehfm@strsoh.org
Subject: Investments

This letter is being written in support of the comments of Dr. Dennis Leone in regards to the bonuses planned for your investment department. I am very well acquainted with investment analysts, and most of their careers rise and fall depending on their judgement. A group like the one working at STRS would not hold a position for long if they worked in an investment house such as McDonald & Company or any of the other Ohio firms if their recommendations resulted in a loss such as we've just had. While perhaps few could have foreseen the huge losses to the Stock Market, all are paid for their expertise, sans bonus, and to NOT have even had an inkling of the Tsunami of losses that have occurred seems to me that perhaps the collective expertise of the entire group is wanting. To give them a bonus for their disaster makes me wonder if the Board is not guilty of malfeasance. The Board members' job is to protect the members of STRS, not their investment unit. I suspect we have more than a leg to stand on if we were to take the Board to court.

I am a health care provider, and I do not see a bonus when I see more patients in a day than expected, or because of my intervention avoid a dramatic illness or circumstance for a patient. There is no expectation of receiving such a bonus. I was hired by a public health entity to a particular position which pays well below the amount the investment personnel apparently are taking home and I satisfy myself with what I am paid. I must say that the teachers and professors and other members of STRS are definitely not given bonuses commensurate to how many successful students they have in a year, and my former husband, a professor also member of STRS does not receive a bonus based on how many physicians are graduated from the medical college where he works. In good or bad weather, there are no bonuses, and STRS should cease and desist from handing out bonuses in good or bad years. It is, after all, the investment analysts' JOB to do research on the companies they recommend for stock purchase and to manage the money and no remuneration beyond salary should be expected. I believe that in these times just to have a secure position should be enough of a bonus. Now, to consider giving them a bonus following a particularly BAD year is an insult to all of the members, particularly the retirees. Imagine if I were to receive a bonus for having a patient die due to my prescriptions or malpractice?? That wouldn't make a lot of sense, now, would it? In all actuality, I could expect to have my privileges revoked, and perhaps my license as well. The Securities and Exchange Commission might have a strong opinion on the Board's action.

Has it ever occurred to the Board to have the Trust Department of the bank that handles their banking handle the task of managing the investments of STRS? The Trust Department would merely charge a percentage of the investment amount which I am sure would fall far below the added salaries and benefits, etc., of your investment unit. Like many items that the Board has voted itself over the years, having an in-house investment analysis department is a luxury the retirees of STRS can ill-afford.

Respectfully,
Monica Oclander
Indianapolis, Indiana