Rudy Fichtenbaum: How Do We Bring Change to STRS?

                    How Do We Bring Change to STRS?

                                        Rudy Fichtenbaum

"We are constantly told that we need to pay bonuses to attract talent otherwise people will leave. Well, that means the people who work investing our pension money have alternatives if they are not happy working at STRS. But members getting pensions have no other choices. They don't have any other pensions, they are subject to the Windfall Elimination Provision if they get Social Security at all, and many cannot just go out and get a job. This is serious stuff and literally there are lives at stake."

The following is (in italics) a short excerpt from an email I received from an individual who I believe truly cares about our pension but feels that the tactics I am using, mainly being openly critical of senior staff and some Board members, is a mistake. What follows is a lightly edited response (mainly correcting a few typos which seem to be the bane of my existence).

"[name deleted]'s comments echo my concern with how your investment ideas are being promoted. Wade Steen posting an open letter on Facebook, that in essence called everyone at STRS a bunch of liars, is not helpful. While pleasing to the critics of STRS, your last sentence in an otherwise excellent report, has, in my opinion, a similar effect."

"I know you are serious about exploring these investments ideas. To accomplish that, a change of focus may be necessary, concentrating on opening the minds of those who really matter - your fellow Board members - rather than forcing them into a defensive position that resists change."

"I would like to see a full airing of these ideas, with fact-based pushback from the other side. I believe that sharp facts are more effective in changing minds than blunt-force name-calling. Donald Trump might disagree with that observation, but I'm sticking with it, even if only to maintain a little optimism about the country and STRS. Allow your "ends" to guide your approach, not simply justify your 'means.'"

As an academic, I would much rather be arguing over facts. And frankly, I believe that I have put out more facts than most of the other people engaged in this "conversation", including the STRS senior management staff. The staff have a tremendous information advantage and they have been unwilling to share that information. They also present misinformation and misrepresent certain facts. If one side plays dirty, withholding information and misrepresenting facts and uses appeals to authority as the main vehicle for making their arguments, then we end up where we are today.

Honestly tell me if you were Wade Steen and were treated the way he was treated at the last Board meeting, not to mention having basic information that he requested as a fiduciary withheld, how would you react? If we want a debate in accordance with the Marquess of Queensberry rules, then the senior staff and the Board for that matter, are going to have to take the initiative because they hold the power. I would be happy if we had the same access to information and if the Board would be willing to hear from members. But from what I can see, they don't really want to hear from members, and they are certainly not sharing information, at least not the kind of information that is needed to make an honest assessment of the performance of the pension fund.

Again, the fact that members had to pony up $75K when we already made our pension contributions, because members felt that STRS was hiding information and not be straight with members, is truly an insult.

When you are the underdog, you must use all the tools at your disposal. By that I don't mean lying or misrepresenting facts. But at this point we are involved in a political battle and that inevitably leads to questioning people's motives, which I know is uncomfortable terrain. So, unless STRS senior staff want to change how they treat members and Board members who raise questions, those of us who want to get to the bottom of what has happened and how we can fix it are going to have to use all the tools at our disposal. And again, just so what I say is not misrepresented, I am not talking about lying, misrepresenting facts, or withholding evidence. If I make a mistake in the presentation of facts and it is pointed out to me, I am not afraid to own up to my mistakes and offer a correction. But beyond that my suggestion is STRS senior staff and Board members, who are standing in the way of trying to fix the pension, just need to put on their big boy pants. What is at stake here are the lives of members who depend on their STRS pension to pay their rent or mortgages, to buy food, to pay for medical bills, to visit their grandchildren and live a dignified life in retirement.

Think about it this way. We are constantly told that we need to pay bonuses to attract talent otherwise people will leave. Well, that means the people who work investing our pension money have alternatives if they are not happy working at STRS. But members getting pensions have no other choices. They don't have any other pensions, they are subject to the Windfall Elimination Provision if they get Social Security at all, and many cannot just go out and get a job. This is serious stuff and literally there are lives at stake.

Dr. Rudy Fichtenbaum is Professor Emeritus of Economics at Wright State University.  In May, 2021, he was elected to a retired seat on the STRS Board, effective September 1, 2021