Hey, Scott, why are you just NOW jumping on the bandwagon, after we already raised $75,000 for the audit and had strong support from OFT and ORTA? A little late, aren't you? You call that leadership?

From Scott DiMauro, OEA President

June 25, 2021

Distribution: All Local Presidents, Board of Directors, District Leaders, UniServ Leadership Council Chairs, OEA-R Advisory Council, and all OEA Staff

Dear Colleague –

As you may have heard from social media or conversations with others, the Ohio Retired Teachers Association (ORTA) recently commissioned what they are calling a “forensic audit” of the State Teachers Retirement System of Ohio (STRS) and raised $75,000 to pay an outside consultant named Ted Seidle to conduct the study. Seidle’s report, entitled “The High Cost of Secrecy,” was recently released and alleges that STRS is not sufficiently transparent in providing information on investment fees and suggests that changes in STRS investment strategies could save money in a way that could help contributing and retired members of the system.

OEA urges the STRS Board to take the report seriously and fully investigate the claims. Maximizing investment returns while minimizing both fees and risk are in the best interest of all members of the system.

Further, we expect STRS to communicate openly with its members about the report. Do the allegations have merit? Why or why not? Where deficiencies have been found, what actions are being taken to improve performance? OEA has confidence that the elected members of the Board will closely look at STRS investment practices and respond to the report so that STRS members know their pension dollars are invested prudently.

It is important to note that STRS investment performance, verified by third parties, has been strong and among the top 25% of public pension funds. Utilizing internal investment staff helps to minimize fees paid to Wall Street brokers. Additionally, alternative investments, net of all fees, have outperformed the rest of the portfolio and posted strong returns over the past 20 years.

Ultimately, the most important thing is that the financial condition of STRS continue to improve. This helps to secure the long-term retirement benefits of active and retired teachers alike. As conditions improve, OEA wants to see restoration of COLA payments for retirees and lower employee contributions for active teachers. In the current fiscal year, STRS investments are up over 25%. Clearly, STRS is having some measure of success, and nobody should pretend otherwise. Conversely, investment returns should not be used as an excuse to evade tough scrutiny of STRS practices and performance. Each dollar entrusted to STRS is precious. As fiduciaries, the STRS Board and staff should take this opportunity to thoroughly review its investment program in all areas and communicate openly with members of the system about that process.

We share this information with you to provide some context regarding inflammatory and one-sided social media posts you may be seeing and to assist you in answering questions from members. As we learn more about the situation, we will keep you updated. In the meantime, please know that OEA will continue to advocate for the protection of our defined benefit pension plans for current and future retirees and ensuring benefits are reliable and adequate to provide economic security in retirement.

In solidarity,
Scott DiMauro
President
Ohio Education Association
225 E. Broad Street,
Box 2550 Columbus, OH 43216-2550
614-227-3177
www.ohea.org