Thursday, May 11, 2017

You can bet nobody at STRS has to look for a cheaper apartment now! Thanks, Board!

STRS retiree to John Curry
May 11, 2017
John, I am looking into finding an apartment due to increase. As my STRS check is going down, I have to look into lower living costs. I just can't believe I am facing this due to the incompetency of STRS. I only fear more doom is coming. I have called several places and told them about STRS and its financial condition. Several of the resident managers said they have gotten calls from people like me and the STRS mess. Isn't that just wonderful??? I can't believe I am facing this at age seventy. Can't something be done with this STRS group?  I know they meet next week, but they seem insurmountable.

John Curry: the STRS investment staff should participate and retire in the same system they invest in

John Curry to Dean Dennis
May 11, 2017
Subject: Re: What STRS isn't doing
Dean...well stated. Another concept that I would like to see is that the STRS investments staff be forced to participate (and retire in) the SAME SYSTEM that they invest in ....rather than retiring in OPERS as they currently do. Maybe that would cause them to invest smarter and be more conscious and responsible with their investing. As it is now....if they make risky investments to pad their healthy bonuses and FAIL...they simply don't get the bonus....but their nice salary remains intact and the retirement system THEY retire in doesn't take a hit for their careless risk taking.
John Curry

Dean Dennis: What STRS isn't doing

Dean Dennis to Jim Stoll
May 11, 2017
Subject: What STRS isn't doing
Jim,
I've been going to the STRS meetings with Bob lately trying to encourage them to make investments in our interests. For instance, why has STRS lowered their earning assumption to 7.45%? This makes no sense. Are they trying to enrich their investment staff or our pension fund? I say this because S&P 500 has historically annually averaged over 9% since the 1920's. There have been sixty (60), thirty year (30) cycles from which to measure. In other words, over a thirty year cycle how much will the S&P 500 return on an annual basis? The answer is the S&P has always returned greater than 8% and over a third of the time has returned greater than 10%. Simply investing in ETFs (Equity Trading Funds) tied to the S&P 500 lowers risks and provides a greater return that STRS performance.
Also consider this, why aren't they investing significantly in other baskets of ETF's in different segments to increase what they can earn with our monies?  Here are four: XSD (a basket of semi-conductor stocks) it has returned 157% over the last 5 years, PSCT (a basket of information, software and electronic stocks) it has returned 142% over the past 5 years,-VHT (a basket of stocks tied to health care) it has averaged 124% over the past 5 years, XBI (a basket of biotech stocks) it has returned 170% over the past 5 years.
My point is the above basket of ETF's have averaged 18% annually over the last 5 years. Why are we investing in hedge funds, foreign equities and real estate. It take very little research to discover that Foreign Equities have under performed US Equities over the last 5, 10, 15, 20, 25 year periods. That said, STRS likely pays a quarter of a million annually to outside firms who either don't share this information, or it is simply ignored. Bottom-line, when you refuse to look at solid investments maybe you do need to lower your earning assumption expectations to lower than the market provides.
Dean Dennis

2011 PBIs

Jim Stoll to Nick Treneff
Subject: Investment Staff Salaries and Bonuses fiscal years 6/30/ 2016 AND 6/30/2017
Date: 5/11/2017
 
Nick,
Here is the format you had sent previous similar requests in.  If this is still possible that would be great.
Thanks.
Jim Stoll
(Click images to enlarge.)




Jim Stoll: Public records request to STRS for investment staff salaries, bonuses

From: jastoll@yahoo.com
To: treneffn@strsoh.org
CC: nevilleb@strsoh.org, board@strsoh.org
Date: 5/11/2017 2:06:34 P.M.
Subject: Investment Staff Salaries and PBI  Bonuses for Fiscal year ending 6/30/2016 and 6/30/2017
Nick,
I'd Like to make a public records request that you send me the Salaries and PBI bonuses and total compensation for each of our entire investment staff via email or in electronic form for the fiscal year ending 6/30/2016.  I'd also like the same for fiscal year 6/30/2017 as soon as that year is calculated.
Thanks in advance and I appreciate your help.   Feel free to call if you have any questions.
Sincerely,
James A. Stoll

John Curry: Time to change the Ohio Revised Code

John Curry to Jim Stoll
May 11, 2017
Subject: Re: Fw: STRS Investment Staff
Agreed, Jim.....AND....the ORC needs to be changed to "force" the STRS investments staff to pay into and retire with STRS rather than OPERS as they should be risking their own retirement security with their investments. As it is now...they can take huge risks and if they fail.....they just don't get their bonus....but their retirement system's health is not affected. 
John Curry

Jim Stoll: Why STRS Ohio is losing money and what's keeping the investment staff VERY happy

Jim Stoll to John Curry
May 11, 2017
John,
This is exactly why STRS OHIO is losing money and why our pension dollars should be invested in Index Funds..... It is ridiculous for STRS to pay 88 Investment staffers Millions in salary and millions more in BONUSES for subpar performance.... They should NEVER receive a bonus if they fail to beat their own 7.5 % investment return Benchmark. We should heed Warren Buffett's Advice.
Jim Stoll

Wednesday, May 10, 2017

Corruption, fraud and theft at ORTA? Say it isn't so!

Retired teachers non-profit faces allegations of theft, mismanagement
Dayton Daily News
May 9, 2017
Columbus —The recently fired executive director of a non-profit lodged a complaint with the Ohio Attorney General that alleges he was fired after uncovering corruption, fraud and theft.
John Cavanaugh, who was dismissed earlier this month by the Ohio Retired Teachers Association, said in his complaint: “This is an urgent matter as my office manager and I have been tipped off that the Executive Committee plans to destroy evidence of criminal activity and fraud once we are terminated.”
ORTA, a non-profit with roughly 20,000 members, keeps an eye on pension issues impacting retired Ohio teachers.
“Everything you got in front of you is just ridiculous,” said Randy Overbeck, president of the ORTA board, regarding Cavanaugh’s complaint. “John was fired for insubordination and breach of confidentiality.”
Cavanaugh declined to comment.
Evelyn Massey, who joined ORTA as the office manager in April 2016, also filed a complaint with the Attorney General’s Charitable Law Section, detailing that she found a lack of documentation for credit card charges and extra paychecks issued to some ORTA employees.
But on Tuesday, Massey said she was pressured by Cavanaugh to file the complaint in February and now she wants to withdraw it. “He wanted me to go ahead and file a complaint, so I did. He was my boss,” she said.
She said she isn’t sure if the lack of documentation for some checks and charges is a matter of honest mistakes or something more serious.
In June 2016, Mark Anderson, a certified public accountant who reviewed ORTA financial records, told the board that the previous administration did not appear to know how to use the sophisticated accounting and bookkeeping software that ORTA purchased.
The accountant also flagged ORTA’s use of several credit cards, saying that charges were excessive, and he noted that ORTA’s investment performance has been below average.
In a February email to Overbeck, Cavanaugh outlined 21 steps he had taken as executive director to tighten internal controls, review investment performance, remedy tax errors with the IRS and monitor cash flow.
This newspaper obtained the Cavanaugh and Massey complaints from the Attorney General’s office through a public records request. The AG’s investigative records are not made public unless it results in a court case or settlement, a spokesman said.

Bob Buerkle: A letter to STRS retirees and active teachers

From Bob Buerkle
May 10, 2017
To all STRS Retirees and active teachers,
When STRS held a March, 2017 informational meeting in Cincinnati, Nick Treneff and Gary Russell told the audience that STRS was still considered a "Top Quartile" pension system. NO WAY JOSÉ!
That boat shipped out on 01/07/2013 when the Ohio Legislature gave STRS the authority to eliminate our COLA.
STRS is now back to treating our money as if it was theirs again. They want to fund their ideas, not deliver on the pensions they promised. That is exactly what got STRS Director Herb Dyer fired in 2003. Dyer wrote a retiree saying “the pension system’s money is the Board’s money to spend as they see fit,” and “perhaps retirees should go out to dinner less often.” A few months before this time Dyer spoke at a meeting in Cincinnati covering his infamous leaky bucket of health care funds. That time he suggested to the audience that they "should consider downsizing from a Cadillac to a Chevy".
We did not expect to buy Cadillacs in the future, since few of us bought them when we were working.  Instead of STRS Management telling us to how to manage our finances after they have ravaged them, let's put the real problem out there. STRS keeps losing more of our money, our finances! "I say, Just invest our money in the various indexes that historically have always returned over 8% over 30 year periods.  That is the only requirement necessary so STRS can fulfill the retirement promise that was made to us. That is STRS' most important job! That's what you are employed to do, and at our expense".  Remember, it is our money not yours. You are supposed to be our Fiduciary and deliver the Benefit what was codified and Defined by law when we accumulated our benefits while working, and which were  specified by law when we retired.
STRS Management and the Board have now stolen over 25 Billion dollars of our promised pension benefits in their two money grabs. It is our money but they think they can do what they want with it by telling us that this is what they need to do to provide assurance that STRS will be able to pay future benefits. That's hogwash!  This is a smoke and mirrors game by management and it is not what the retirees and current members need or want.
After the first 13 Billion Dollar grab in 2014 no lawsuits were filed by any Union, any Organization, any Individuals or any Class Action Lawyers. Emboldened by this non-reaction to the STRS pension takeaways, they looked ahead to other takeaway ideas, describing them as "necessary to be able to pay future pension benefits". So in February, 2015 the STRS Board voted to adopt a "30 Year Closed Amortization Funding Period". This is costing Billions of your pension dollars to implement and it was not necessary. This is a lofty goal but should only be attempted when it could be achieved without destroying retiree pensions. A good year that this could have started would have been in 2000 when STRS had a funding ratio already at 92%. In 2017 STRS is in no position to start a 30 year closed funding program when we have a funded ratio standing at only 69%. All they are doing is stealing our money to fund their project. This is something that STRS Management wants to do for their own self desire and self aggrandizement. It is not what retirees need, it's what STRS wanted to do with your money, not what you wanted and not what you needed! 
It is also not a Legislative Mandate.  And if "Closed Funding" is so great, why doesn't OPERS do the same thing for their members and retirees?  OUR STRS EMPLOYEES ARE IN THE OPERS RETIREMENT SYSTEM.  WHY DON'T THEY RAISE THE ROOF OVER THIS NOT BEING DONE FOR THEIR OWN PENSION SYSTEM?  WHY DON'T LEGISLATORS FORCE THEIR OWN PENSION SYSTEM TO DO THIS FOR THEM?  AFTER ALL YOU KNOW, THIS "30 YEAR CLOSED FUNDING PERIOD" IS ALL THE RAGE NOW!  The path chosen by the STRS Board and Management is not mandated and should be shelved for now.
STRS already had the tools to deal with 30+ year unfunded periods like they used in the 1980's, 1990's and through 2006. Then STRS management came up with a plan in 2010-11 to seek legislative authority to reduce and/or eliminate our COLA. That is so much easier than writing those time consuming annual letters to the Ohio Retirement Study Council explaining how STRS will get back under a 30 year funding period over a period of years. By the way, this process was followed many, many times in the past and STRS was always able to work their way back under 30 years of funding and this is still the Legislative Mandate. One of the most recent periods occurred after the 2001 recession. STRS wrote their plan each year. In 2005 the plan that was written to work our way back under 30 years of unfunded liability by 2020. Instead of taking 15 years to achieve this it was accomplished in just two years and by 06/30/2007 the unfunded period was reduced from 42 years to 26.2 years.
We should demand that no more unnecessary and non-mandated ideas be implemented until all lost pension benefits are repaid to retirees and restored for current workers.
Bob Buerkle 
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