Friday, March 29, 2013

Mike's credibility is questioned!

Jim Stoll to Mike Nehf, March 29, 2013
Subject: Re: STRS Ohio Responds to Unjust Criticism Regarding Investment Program
Dear Mr. Nehf, 
I find your response to Mr.Kostyu's very fair and factual article regarding bonuses paid to STRS investment staff very biased and misleading to all STRS stakeholders. 
A retirement system which "paid out 6 billion while taking in 2.9 billion" is totally broke and means that your investment staff "has failed" the people somewhere along the line despite what you say is "positive investment returns in both the short term and long term time periods."  If the investment staff's results are so positive as you state, why does STRS have such dramatic solvency issues .   It is comical for you to defend the investment Staff's day trading of Facebook stock and yet also defend the inability to trade out of stock positions quickly enough to prevent 30 billion in losses several years ago.   Your reasoning doesn't add up - you can't have it both ways.
You have said, and I quote, "without changes to the system, STRS will be unable to pay benefits in the future."  My suggestion would be that those changes should have begun with your investment staff's outrageous bonus structure and not some poor retired teachers COLA!! 
Why are dramatic changes to the system necessary if your investment staff returns are "so positive over both short and long term periods as you state"------- Your reasoning just doesn't add up. 
STRS compensation is totally out of line and certainly out of touch with those active and retired teachers whose benefits you have just recently and rather dramatically cut.  No public employee should ever receive compensation in excess of 500,000, which several of your employees do in any given year.   This is more than not only the Governor of Ohio, but also the President of the United States. A PBI benchmarking system which allows bonuses when the system loses 30 billion in assets as it did a couple of years ago is totally broke and needs to be fixed. 
You make a false statement to your constituents when you state in your response that STRS did not have a paper loss of 5.6 million in their Facebook investment as was written by Mr. Kostyu in his article.  Those figures were given to Mr. Kostyu and myself by your office and came directly from Mr. Nick Treneff.  For you to deny these facts in an article to your membership is in my opinion malfeasance in office and a gross neglect of your fiduciary duty. 
To STRS stakeholders I can provide hundreds of examples of investment funds which have outperformed our STRS investment staff over the past ten years costing STRS stakeholders billions instead of saving us millions as you state. 
Please quit defending a compensation system for your investment staff that simply doesn't work. 
Respectfully Submitted,
James Stoll
Sycamore Schools

[Read Mike Nehf's response here if it does not appear immediately below.]
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