November turned out to be a heavy dose of STRS virtual meetings. For the most part, committee and Board meetings are subject to the Sunshine Law which means they are open to the public. The STRS Investment Committee met November 18 and the STRS Board met on November 19.
There were 3 parts to the investment committee meeting: Long-Term Strategic Planning for Investments, presentation by outside consultant Callan; What Options Can State Pension Systems Consider to Increase Returns, presentation by outside consultant Cliffwater; and Update on Potential Strategies for Future Implementation, presentation by STRS staff. As usual, throughout the presentations, research studies and returns point out that STRS leads its peers and long-term horizons must be maintained while short term results show the STRS general fund is headed in the right direction. Appointed Board member Steen vocally pushed throughout the presentations that the outside consultants need to assist the STRS staff with ways to improve investment returns.
The Board meeting itself was brief. September and October minutes were approved. I mention this because September Board minutes were tabled last month because of appointed Board member Steen’s desire to make additions. For whatever reasons, he withdrew his additions, and the September minutes were approved as originally written. [This is a transparency issue for me, no discussion really. A question was asked on which September minutes were being approved and the original were approved by one and all]. The Board meeting then proceeded into the annual Retirement Board and Education & Planning Meeting. Topics: Preparing for the Quinquennial Review (Five-Year Actuarial Experience Review) and Actuarial Matters by STRS staff; STRS Ohio’s Variable Pay Program for Investment Staff – the Basis for Incentives by outside consultant Aon/McLagan; Plan Governance and Fiduciary Duty (including Board Policy Updates, staff; Ethics Refresher for Ohio Public Pension Officials, staff; Board Self-Assessment led by outside consultant Dr. Ed Gaydos; Long-Term Planning for a Sustainable Retirement System by outside consultant Callan. After these presentations, the Board approved Routine Matters. Under old/new business, active elected Robert McFee moved that STRS Executive Director Neville report at the December meeting regarding the feasibility and costs for recording Board meetings, All Board members voted ‘Yea.” Steen also made a motion that he later withdrew. Closing comments were then made and the meeting adjourned about 4:30 p.m.
[I am not going to break down all of the above with the notes that I took. This would become a 10 pager. Suffice to say that the Performance Based Incentives are being scrutinized but are needed to maintain very good investment staff. If all of STRS’s investments were done by outside consultants the cost would increase substantially. Some very good discussion ultimately happened during the Board’s self-assessment. Kudos to Steen, Stein, Mayerfeld, Price, Walters, Rhodes, McFee and newly appointed Claudia Herrington for voicing views/concerns although speak with “One Voice” is so very prevalent. More than once a long investment horizon was mentioned. STRS just celebrated 100 years and is now looking at the next 100 years. The long horizon refers out to 20, 30, 40 years of investment growth. STRS and its Board members need to better articulate the liability hole it is working and slowly improving at the expense of actives and retirees. Listening carefully, I am 74 nearing 75, a COLA is probably not in my future unless I live to be a centenarian. Actives, enhancing your benefits at retirement is probably not in your future, unless you are just in the beginning years of your 35 years odyssey to full retirement. With all this in mind, remember that the two retirement seats and an active seat is up for election in the spring. We need Board members that will vote to hold STRS’s feet to the fire. Even with my gloom comments which I do believe, I do not see that happening at meetings when a Board member requests a month delay or STRS’s staff 3 percent annual merit-based incentive is almost unanimously approved without each Board member’s comments.]
The next dates set aside for the Board meeting are December 18 ,19, & 20. The Board meeting will probably be December 19. You must register to attend at www.strsoh.org then under “News” in the first column click on Board meeting Information. Registration usually opens the Friday before the meeting, this time, December 11 and should appear on the homepage. Board materials should be available thirty minutes before a meeting by going to the STRS homepage, clicking on “About Us” in the top banner and then clicking on “Retirement Board” and then “Most Recent Board Meeting Materials” in the first column. [STRS does not make this easy and only this month promised to post materials 30 minutes before the its meetings. Transparency]
In union, Dan MacDonald, Executive Director, Local 279-R, NEO AFT Retirees
