Robin Rayfield: Report on the November 2020 STRS Board Meeting
Report on the November 2020 STRS Board Meeting
By Dr. Robin Rayfield, Executive Director of the Ohio Retired Teachers Association
(From the November 2020 ORTA Newsletter)
STRS News
The STRS Board met on Thursday November 19, 2020. The meeting itself was what the STRS Board refers to as their Educational and Planning Meeting. The board takes this time to:
• Plan for the 5-year actuarial review• Review their fiduciary responsibilities• Review ethics responsibilities• Hear from their paid actuary firm (Callan) about long term planning• Conduct a board self-assessment
As you might expect, the discussion was robust and many board members that do not speak were engaged. Mr. [Wade] Steen (appointed member) remained focused on ‘restoration of COLA’. Mr. Steen constantly asks ‘tough’ questions of the STRS staff and is vocal in his opinion that until the STRS system is able to meet its obligations, there can be no relaxation on the part of the STRS staff. Several charts and graphs were presented showing the level of funding of our pension system. Unfortunately, none of these materials showed any evidence that retirees will see a COLA, either in the near term or long range.
There was considerable discussion on the ‘performance incentive pay program’. The system for paying our investment staff the large ‘bonuses’ that they receive each year is very complicated. Apparently, these people can receive a bonus, even though they did not meet the benchmark in the policy approved by the board. If, for example, the individual did not make their benchmark this year, but they did meet the benchmark in a previous year, or if the total fund reaches a benchmark he or she may still receive their bonus.
Again, the system for calculating these performance incentives is very complicated and although I listen very carefully, I am unsure of just how these incentives are calculated. One thing I have observed, however, is that the investment staff always receives an incentive bonus. Other board members were asking appropriate questions during the discussion, as well. I am optimistic that the questions asked will lead to a better understanding for everyone regarding the incentive pay program at STRS.
Forensic Audit
As many ORTA members are already aware, ORTA is currently collecting donations to pay the expenses to Benchmark Financial to engage in a forensic audit of the STRS pension system. As we have previously communicated, the decision to attempt this was not an easy one. But after reviewing the circumstances associated with the STRS pension system, we felt it was time to get an independent review of what is going on with our pension system. Some of the important data points that lead ORTA to this decision include:
• Retirees are not receiving what was promised and guaranteed by law. We have gone anywhere from
5 to 6 years without receiving the promised level of benefits.
• Active teachers are currently paying in 40% more than older retirees paid. Coupled with having to work between 5 to 8 more years beyond the previously required 30 years, this is a significant burden placed upon our active fellow educators.
• Projections from STRS indicate that there will be no increase in retiree benefits for 15 to 20 years, despite the promise made to retirees at the time of their retirement.
• Meanwhile, employees at STRS continue to receive base pay increases and investment staff receive ‘performance incentive pay’ even though STRS is not achieving its assumed rate of return.
Therefore, ORTA has taken on the challenge of raising $75,000 through donations from a variety of sources. ORTA is asking ORTA members to contribute to the Forensic Audit. We are also asking for and receiving donations from non-ORTA member retirees of STRS and from many active STRS members. Local chapters of ORTA are also sending in contributions.
Please check out the link in this newsletter to get details on how you can donate to the forensic audit. So far, (18 days into the donation drive) ORTA has topped $19,000 in collected contributions! By the time you receive this newsletter, we could be on the way to $20,000! Please consider donating to the Forensic Audit. If every ORTA member that received this newsletter contributed $15 we would make our goal and get answers to questions we have about our pension system.
posted by Kathie Bracy at 5:35 PM
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