STRS is only over 80% funded because retired teachers have donated 6 years of their COLA to STRS and active teachers are the only public employees in the United States projected to receive a negative return for their pension contribution.

Dean Dennis' speech to STRS Board

December 16, 2021 

Dean Dennis, retiree from Cincinnati Public Schools

At the September 16, Board meeting, I stated my doubt regarding the STRS management claim their FY2021 investment expenses were only 12 basis points. I asked that the Board be shown the calculations. I brought this up again at the October Board meeting and called the Chair prior to the November meeting. Management is claiming, "after all management fees and costs, including carried interest and other fund expenses, investment costs were 12 basis points. CEM states our peers average between 50-60 basis pts. Our Board Chair forwarded my concern to management who sent an email to me. It stated my request was overly broad and failed to satisfy the requirement of public records law and mentioned some specific laws. Then graciously the email shared, "the information you seek may be found on page 58, note 3 of the 2020 Comprehensive Annual Financial Report" which was a references the Dietz Method. I don't believe the STRS historical investment costs are 12 basis points. However, we might have a history of misreporting.  Maybe the State Auditor can help.

Moving on to last month's Board meeting. What the public may not know is that the presentation two of our Board members attempted to make, with a former Board member, was submitted to STRS management 10 days prior to the presentation. This might shed some light on why the presentation was continuously interrupted by management.  Management clearly knew  the presentation was going to discuss a new direction for bringing revenue into STRS. It would present a model used by a Canadian pension plan called HOOPP. HOOPP is regarded as the best public pension plan in North America.  STRS, not so much.  HOOPP is over 120% funded using investment strategies considered low risk. STRS Ohio's strategies are considered high-risk.  STRS is only over 80% funded because retired teachers have donated 6 years of their COLA to STRS and active teachers are the only public employees in the United States projected to receive a negative return for their pension contribution. 

Why wouldn't STRS members want to hear a presentation about the HOOPP model? They would.  Why wouldn't STRS management want members to hear a presentation about HOOPP?  Simple, discussions about CLAWing back our COLA aren't a threat to their jobs, however, a discussion that might leave them CLAWing back for their jobs is a threat.  This is why STRS management at one point shared they have used HOOPP strategies for over 30 years; but then turned around about a minute later and stated they back-tested a HOOPP strategy and it would have lost $21 billion since 2009. Confused? STRS seemed to use whatever was convenient depending whether they were on the offense, or defense. Supporting STRS management was Cliffwater's CEO who potentially exposed privileged executive session information, during the very public Board meeting.  Time will tell if there will be any consequences. The presenters must have been on to something.

Dean Dennis is a retired teacher from Cincinnati and a strong advocate for the restoration of teachers’ earned benefits, particularly their COLA, from STRS Ohio. He is also a noted leader for the Facebook group Ohio STRS Member Only Forum.