STRS Ohio to receive 3 audits in 2021

Audits await Ohio teacher pension

1 investment lost $525 million

Anna Staver

Columbus Dispatch

Posted in the Toledo Blade

April 25, 2021

COLUMBUS -- The State Teachers Retirement System of Ohio is getting three independent audits in 2021.

Two audits come from the Ohio Retirement Study Council, which advises state lawmakers on all five public pension systems.

The third audit, however, is sponsored by a group of retired teachers who say Ohio is mismanaging the pension fund while disseminating false and misleading information to stakeholders.

The Ohio Retired Teachers Association raised $75,000 for a "deep dive" into the pension fund's management, Dean Dennis said. STRS is supposedly doing well but retirees haven't had a cost of living increase in years.

It's time, Mr. Dennis said, to find out why.

All three audits will take months to complete.

"We never beat the market," Mr. Dennis said. "Yet we pay our investors anywhere from $9 million to $14 million bonuses every year on top of six-figure salaries to underperform the market."

It's true STRS' annual returns fall below the S&P 500 Index Fund, but that's because -- like nearly every other public pension system in the country -- it doesn't put all its money in the stock market.

Folks only need to look as far back as the 2008 stock market crash to understand why pensions diversity, STRS spokesman Nick Treneff said. Stock prices dropped more than 50 percent between October, 2007, and March, 2009.

In March it was reported that STRS lost more than half a billion dollars on a private equity investment in Panda Power Funds.

From 2011 to 2013, State Teachers Retirement System of Ohio invested $525 million with Panda but the investment is now valued at zero, according to Mr. Treneff.

How much gets put into each kind of asset is a big debate though.

"There is a general pattern of diversification, but they are not identical," RVK Investment consultant Jim Voytko said during a presentation he gave to lawmakers in February. "There is no formula that guarantees one asset allocation is better than another unless you are looking in the rear-view mirror."