Tom Curtis re: Looting of Ohio Pension Funds

From Tom Curtis

October 27, 2021

Letter to several newspapers

Letter to the Editor,

I am a retired teacher and tax payer from Canton, Ohio. I am deeply concerned about the lack of oversight of the State Teacher Retirement System (STRS), by the Ohio Retirement Study Council (ORSC) and by our Legislature.

This should be of high concern for all tax payers! STRS pension contributions come from two sources. School system’s tax dollars contribute 14%, matched by a 14% contribution by each teacher. Ohio teachers and taxpayers contributions (totaling 28%) is the 3rd highest contribution rate in the US.

There has not been a fiduciary audit of STRS commissioned by the ORSC in over 14 years. Ohio law requires the ORSC to have an audit every 10 years. The last was is in 2006. All of the 5 Ohio pension systems are endangered by the Ohio Retirement Study Councils’ (Chaired by Rep. Rick Carfagna, Co-Chaired by Sen. Kirk Schuring) failure to have required audits performed. The ORSC does not respond to requests from teachers asking why they have not performed their lawful duty and fiduciary responsibility to Ohio citizens. The ORSC rarely responds to any questions. There is apparently no oversight over the ORSC.

This year, STRS members were so upset with the management of STRS, the Board and the ORSC, retirees raised $75,000 of their own money to commission a forensic audit of STRS conducted by a nationally renowned pension whistle blower, Edward Siedle, a lawyer and former investigator of the Securities and Exchange Commission (SEC).

The findings were 121 pages long and finds that STRS shades data to present a false light on performance and ignored audit recommendations that would have protected the pension from looting by fund managers and undeserved bonuses to mediocre investment employees.

STRS has broken several benefit promises given to retirees at retirement without grandfathering any when changes were made. We were promised a 3% cost of living increase. The last year that 3% COLA was given was 2013. No COLA’s have been given since 2017. STRS claims they do not have enough funds. Yet, they recently approved over $6.7 million of performance bonuses to the STRS investment staff and have given multi-millions in bonuses to investment staff over the past two decades.

STRS overstates performance and understates fees and expenses. They did not implement the findings of their last audit in 2006, such as adding additional auditors. They refuse to be transparent in their investments. One alternative investment, Panda Power lost STRS over a half a billion dollars. That information took three years to be revealed.

Thomas Curtis

Canton, Ohio