Jim Reed to Steve Wartenberg: The bonuses are rewarding failure

From Jim N. Reed, September 16, 2009
Subject: STRS Bonus Pay for Failure!

Dear Mr. Wartenberg,

Please accept my personal and collective (education retirees) gratitude for your research and publishing of today's "Dispatch" column regarding the issue of PBI's at STRS.

As a 45-year public school educator I cannot express too strongly my disgust with what my retirement system has done through its mismanagement to shatter the promises made to current and prospective retirees of an affordable, secure retirement.

Most shameful is the abrogation of the fiduciary duties legally assigned (ORC 3307.15) the board to protect the funds of 450,000 stakeholders and their beneficiaries.

To even consider rewarding our employees (STRS staff) for investment failure is ludicrous but to actually pay preposterous bonuses (with our assets) to investors for not losing as much as other wrong-headed investors is something out of the Twilight Zone. And when one considers the amounts of these bonuses on top of the ridiculously obscene base salaries it's enough to make one regurgitate.

Not only are billion dollar mistakes being rewarded through the PBI policy to our employees against our approval (the board does not represent the STRS-literate retiree), it must be remembered that these employees have no real vested concern with our retirement system. They belong to PERS and have benefits far exceeding those of the STRS stakeholders. One might consider their employment as a vested interest but how much real interest, concern and incentive does an employee have when errors and mistakes go unpunished, when their families' security is not jeopardized by their poor workplace decisions? A huge bonus and a staggering salary are the reprimand!

Another of the obvious disconnects is the out-of-touch mentality of the majority of the STRS board and its executive director. They do not connect with the average retiree. This has been an ongoing issue for the past decade. Just look at the track record of this entitlement philosophy. In 2003 Dr. Dennis Leone published his research into the mismanagement and fractured ethical standards of board members and the executive director. Much of the dissemination of this award-winning investigation is credited to courageous reporters who recognized the information used to smash STRS's credibility came from their own records. Dr. Leone was only the messenger. Thanks be to Dr.Leone and fellow board member Mr. John Lazares for their relentless reluctance to serve as a rubber stamp for continued dysfunctional mismanagement.

Again, Mr. Wartenberg, thank you for your journalistic courage to cover the story of the embarrassment our retirement system has brought to the education profession in Ohio.

Jim N. Reed
STRS stakeholder