Comparison: SERS and STRS Top 10 Salaries

From John Curry

September 10, 2021

SERS vs. STRS Top 10 Salaries (bonuses included) from Checkbook.Ohio.gov

Please note the 2020 FY STRS salaries are NOT listed, as of yet, as STRS has NOT turned over their information to the State of Ohio so I had to use FY 2019 STRS data. The SERS 2020 data has been turned over to the State of Ohio for months now and is posted on the State's website.

The AVERAGE Top 10 salary for an SERS employee is $256,521

The AVERAGE Top 10 salary for an STRS employee is $536,808

What's wrong with this picture?

Well, lookee who made the top of THIS list!! Surprise, surprise (?)

From John Curry

September 10, 2021

Please see the image below to see the Fiscal Year 2019 (most recent available except for SERS) for this comparison. Data was obtained from checkbook.ohio.gov

I think you'll find STRS found their way to the top, didn't they?

Robin Rayfield's ORTA Forensic Audit Update 2021 (PowerPoint)

 September 7, 2021

Edward Siedle: State Teachers Retirement System Of Ohio Resorts To Pension Theatre To Defend Costly Secretive Investments

https://www.forbes.com/sites/edwardsiedle/2021/09/10/state-teachers-retirement-system-of-ohio-resorts-to-pension-theatre-to-defend-costly-secretive-investments/?sh=1f37e5e9313b 

Forbes 

Sep 10, 2021

State Teachers Retirement System Of Ohio Resorts To Pension Theatre To Defend Costly Secretive Investments 

Edward Siedle, Contributor

Retirement Pension forensics expert and record-setting whistleblower award winner

Photo: Public pensions facing growing public scrutiny and criticism over mismanagement of investments are increasingly resorting to “pension theatre.” GETTY

Fully two and a half months after my firm, Benchmark Financial Services released a report commissioned by the Ohio Retired Teachers Association entitled “The High Cost of Secrecy: Preliminary Findings of Forensic Investigation of the State Teachers Retirement System of Ohio,”  the staff of STRS finally prepared an analysis of the BFS report “for discussion at the STRS Board meeting” on August 19, 2021. This first in-person meeting of the pension board in over a year was open to the public and hundreds of angry Ohio retired school teachers showed up to let it be known they had lost confidence in pension managers.

Photo: Ohio teachers protesting at State Teachers Retirement System of Ohio August Board meeting. JOHN CURRY

While the long-overdue staff analysis prepared for dissemination to the public at the meeting was entitled, STRS Ohio Response to BFS Report, board member Wade Steen who is a CPA recently reappointed by Gov. Mike DeWine as an investment expert stated, “This was not a board response. To my knowledge, the board was never told staff was drafting such a response.” Newly-elected board member Dr. Rudy Fichtenbaum, an economist, said, “It appears to me to be neither an official response of the pension nor its board.”

In fact, the so-called STRS response appears to simply be a defense of pension staff, crafted by staff and its consultant-helpers. Whether any pension board members even agree with the staff analysis “for discussion” is unclear, especially since, according to Steen, board members were only provided with the analysis days before the meeting and never voted to accept or reject its findings.

Immediately following release of the BFS report months ago, Steen and member-elect Fichtenbaum—both unique in possessing financial expertise—issued statements supporting findings and calling for further investigation by the pension and law enforcement into the disturbing revelations. Other board members, who lacked any financial training, indicated they had not taken time to read the expert report—a report which was unprecedented in that it had been commissioned by tens of thousands of participants in the plan who are openly distrustful of management.  

The STRS staff written “self-evaluation” and presentation at the recent Board meeting appears, in my opinion, to be an example of the type of well-orchestrated “pension theatre” to which state and local government pensions facing growing public scrutiny and criticism are resorting increasingly:

Pension staff spent hundreds of hours penning a lengthy hostile defense conceding nothing—no need for any improvement in management of the pension; financial vendors to the pension from all over the world were flown in to personally praise staff; and a few board members chimed in periodically during the live-steamed meeting with seemingly rehearsed comments supporting STRS’s generous dealings with Wall Street. (Whether the majority of the board has even read the BFS report to this day is unclear. Only one member, Mr. Steen, demonstrated knowledge of the report’s findings, asking probing questions during the meeting.)

All seemed to be going well early-on for STRS until its paid consultants began offering information and opinions which conflicted not only with each another, but with their pension client. The pension and its hired experts could not even agree as to whether all investment fees paid to Wall Street, including hefty performance fees, were fees and, if so, whether the fees should be fully disclosed to pensioners and taxpayers.

“Carried interest is not an investment cost… Carried interest is not a fee,” said the pension staff and its consultant-helpers, apparently unaware of the SEC’s publicly-stated position: “Carried interest is a type of performance fee.” Board members Steen and Fichtenbaum both agree that the hundreds of millions in performance fees paid by the pension to Wall Street investment managers are unquestionably investment fees, consistent with the SEC’s position. Whether the rest of the board is even aware the state pension’s views on investment fees are at odds with the federal securities regulator is unclear.

Retired teachers in attendance audibly groaned when an investment consultant to the pension equated paying Wall Street money managers $59 million in fees on uninvested capital, i.e., fees for doing nothing, to paying teachers over the summer when they’re not in the classroom. (Of course, the pay teachers receive over the summer months is not tens of millions for doing nothing—it’s thousands for hard work done during the school year.)

Read the rest of the article here. 

STRS is at it again -- no surprise here!

https://www.governing.com/finance/ohio-teachers-pension-fund-rejects-review-findings#:~:text=(TNS)%20%E2%80%94%20Ohio's%20nearly%20%2495,that%20

have%20%22massively%20underperformed.%22 

Ohio Teachers Pension Fund Rejects Review Findings

The $95 billion pension has pushed back against an independent review that it has not been transparent when it comes to earnings and fees associated with alternative investments like hedge funds and equity firms.

September 7, 2021

By Jim Provance

Governing Magazine/The Toledo Blade 

(TNS) — Ohio's nearly $95 billion pension fund for teachers has pushed back against preliminary findings of an independent review funded by retirees that claims the system lacks transparency and has paid excessive fees and performance bonuses for investments that have "massively underperformed."

"It is unconscionable for the [report's] author to make repeated baseless allegations implying wrongdoing 'in our opinion,' while also stating that [ Benchmark Financial Services] was not hired to detect or investigate fraud and did not attempt to do so," reads the response of staff at the State Teachers' Retirement System of Ohio that was presented at a recent board meeting.

The staff report responded to the first of what is expected to be a series of reports issued by Benchmark's Ted Siedle, a former U.S. Securities and Exchange Commission attorney, financial forensics investigator, and co-author of the book Who Stole My Pensions?

Mr. Siedle was hired by the Ohio Retired Teachers' Association, which had independently raised $75,000 to fund its own audit of STRS books and practices to see if what they'd been told about the fund's current and projected health are true.

Among other things, it hopes to demonstrate that the fund can afford to restore 2 percent annual cost-of-living adjustments that were reduced and then halted in the name of bolstering the fund's long-term solvency.

STRS criticized Mr. Siedle's accusation that it has not been transparent when it comes to earnings and fees associated with alternative investments like hedge funds and equity firms. Mr. Siedle has sued the fund before the Ohio Supreme Court to try to force release of certain documents and has had some success in mediation. 

"The author has written similar reports on public pensions, and a lack of transparency appears to be a consistent theme throughout" in addition to underperformance, high fees, conflicts of interests, and risky alternative investments, the STRS report states. "His approach to this report and complaints about public records laws are not at all unique to STRS Ohio "

Benchmark has since responded to STRS, calling the response "a defense of pension staff, created by staff, with the assistance of its paid consultants."

Read the rest of the article here. 

Tom Curtis to Bill Neville: Handicapped persons should NEVER have been denied parking at STRS

From Tom Curtis

September 8, 2021

Dear Mr. Neville,

I support the request below from another STRS benefit recipient. Don’t deny it, it happened and never should have happened.

STRS stakeholders, including those who traveled several hours and one couple with a handicapped sticker requiring ADA compliance, were denied access to the STRS parking garage on August 19, 2021 for the STRS Board meeting. Our expectation is that, for future Board meetings, the parking garage will be open to its members on several floors and that access will continue to be respected throughout the day. Thank you in advance for accommodating the STRS members and making them feel welcome.

Please have some compassion for us,

Tom Curtis BR

Grendell & Plummer Step Up for Ohio's Public Employees

From Cindy Murphy

September 8, 2021

The STRS Ohio Watchdogs thank Rep. Diane Grendell and Rep. Phil Plummer for introducing OH HB14.

Short title: Regards state retirement system duties, fees, and salaries

Long title: To amend section 145.11 and to enact sections 145.096, 145.117, 145.118, 742.117, 3307.155, 3309.151, and 5505.066 of the Revised Code regarding state retirement system fiduciary duties, Public Employees Retirement System management fees and employee pay, and creating the Committee on Pension Salaries and Fees.

* Rep. Phil Plummer sits on the Board of the Ohio Retirement Study Council (ORSC).

Read about Ohio House Bill 14: https://legiscan.com/OH/bill/HB14/2021

Edward Siedle: Your State Pension Is Not Fully Protected Under Law

https://www.forbes.com/sites/edwardsiedle/2021/09/08/your-state-pension-is-not-fully-protected-under-law/?sh=47227a0e4bbd

Forbes

September 8, 2021

Your State Pension Is Not Fully Protected Under Law

Edward Siedle

Contributor

Retirement Pension forensics expert and record-setting whistleblower award winner

State and local government pensions assure workers and retirees that they enjoy the same protections as the comprehensive federal law, ERISA provides to corporate participants. That’s simply not true. Don’t count on state law to protect your retirement security.

Photo: State and local government pensions do not offer the same level of protection as ERISA-regulated corporate pensions. GETTY

It has been said that the Law is a blunt instrument, incapable of dealing with all shades and circumstances, with little or no regard for individual situations. Management of pensions is doubly complex because equal parts of law and investing are involved. Typically, those knowledgeable regarding pension law, lack investment expertise and vice versa. Lawyers, judges and regulators rarely understand investment theories, strategies and practices well enough to sort through the nonsense and make sound decisions. They are regularly misled by savvy Wall Streeters intent upon selling dicey financial products. Even well-intentioned investment experts rarely grasp nuances which can have severe legal consequences.

Sadly, pension overseers are often the most clueless of all regarding both pension law and investing.

Further, the world of investing is fluid—ever changing. New investment products and practices emerge and old schemes come back into vogue every few years. The law moves slowly—the law does not, and possibly cannot, supply clear, timely answers for every pension management question that arises. 

Derivatives? Bitcoin?

Even where the most comprehensive legal and regulatory framework exists and answers are crystal-clear, your pension is at risk because enforcement or policing of the law is lacking. I have taught U.S. Department of Labor pension investigators. As trained and committed as they are, they’re hopelessly out-gunned by the investment industry. Wall Street runs circles around regulators charged with enforcing pension laws.

However, the vast majority of pensions are not subject to any comprehensive law.

For example, as hard as it is to believe, explain or justify, the approximately $4 trillion in America’s government pensions is not protected by any comprehensive federal or state law.

The Employee Retirement Income Security Act of 1974 (ERISA), the federal law that establishes minimum standards for pension plans in private industry, does not apply to public pensions.

ERISA was enacted to protect the interests of employee benefit plan participants and their beneficiaries by requiring the disclosure of financial and other information concerning the plan to beneficiaries; establishing standards of conduct for plan fiduciaries; and providing for appropriate remedies and access to the federal courts.

Since ERISA doesn’t apply, none of the above mentioned protections exist with respect to America’s state and local government pensions.

Further, both investment managers hired to manage public pension assets and public pensions themselves often get confused as to what legal standards apply.For example, my 2015 forensic investigation of the Jacksonville Police and Fire Pension Fund revealed that while the city pension was not subject to federal (ERISA) pension law, since it had voluntarily adopted the highest ERISA legal standards and then failed to enforce those standards, violators could be subject to personal liability for any ERISA fiduciary breaches. In short, this non-ERISA government pension voluntarily became ERISA governed, much to the confusion of all involved.

So, if ERISA does not cover state and local pensions in America, what law does?There is no comprehensive law. Public pensions are regulated by a thin patchwork quilt of state and local laws. Many of the most significant issues related to managing state and local pensions are unanswered in these statutes. Anything that’s not clearly illegal under applicable law can probably be gotten away with.For example, another investigation of a government pension I undertook revealed that while local law prohibited the pension from investing in hedge funds, the pension had secured a twisted legal opinion from a local firm that an investment in a trust that, in turn, invested exclusively in hedge funds was permissible.An investment in a fund that invested exclusively in hedge funds was not an investment in a hedge fund—got that?

The pension overseers were obviously hell-bent upon gambling in hedge funds. Some Wall Street huckster had sold them on a complex hedge fund investment they neither understood nor would have selected on their own. The overseers weren’t about to let the law get in their way. They didn’t outright break the law—they just bent it in their direction.

Read the rest of the article here. 

Edward Siedle, Pension forensics expert and record-setting whistleblower award winner, is a former SEC attorney, investment banking and securities industry professional, and longtime Forbes writer. He is the nation's leading expert in forensic investigations of money managers and pensions, focusing upon excessive and hidden investment fees and risks, conflicts of interest and wrongdoing. He was named as one of the 40 most influential people in the U.S. pension debate by Institutional Investor Magazine for 2014 and 2015. His preliminary report on his forensic investigation of STRS, The High Cost of Secrecy, was released June 7, 2021.

The "Cadillac of Retirement Systems" (choke, choke) lies again, this time to a couple that needed handicap parking!

 From John Curry

September 8, 2021

STRS Parking Lot is FULL - No Parking?

At the August 19 STRS board meeting there was a couple attending the Board meeting who drove several hours to the meeting only to be told that the parking garage was full. This couple had a handicapped State of Ohio plaque and still had to park elsewhere. All of this at a time when no more than 20% of the STRS building was occupied by actual STRS employees due to Covid 19. In fact....parking level "B" (floor 2 of 5) was never made available to attendees. All of this at a time when STRS had a FIVE-STORY covered parking garage?? They were lied to. "Accommodating and Transparent," I'd say not! Let us hope this excuse of "the lot is full" is not used in the future.

P.S. I wonder what the ADA would have to say about this?

Toledo Blade: Ohio teachers pension fund rejects independent review's findings

https://www.toledoblade.com/local/politics/2021/09/05/Teachers-retirement-system-and-outside-auditors-clash/stories/20210903121?fbclid=IwAR2J1HHZLNrQ1YXVjHcTLpm61sZaiPLx_xhbv9_lBV5vvMOHcT6iXsfrAv0 

Toledo Blade

September 6, 2021 

“STRS is well aware that withholding key investment documents makes it impossible for stakeholders to evaluate staff investment decision-making, as well as judge for themselves the costs and risks related to the investments in the pension's portfolio,” Benchmark said. “These actions demonstrate STRS is so beholden to Wall Street it is willing to jeopardize teacher retirement security by keeping industry abusive practices secret.”

STRS Salaries: The highest paid STRS employees in Fiscal Year 2019

NBC News: STRS Ohio loses millions when Infinity Q collapses; Rudy Fichtenbaum quoted

NBC News

September 5, 2021

What's in your mutual fund? The collapse of Infinity Q is a warning to investors

Quotes from the article, which may be read here. 

Many holders are retail investors; accounts at Charles Schwab held 52 percent of the mutual fund's shares, according to an SEC filing from a year ago. Unlucky institutions were also investors. The State Teachers Retirement System of Ohio, a $95 billion fund, held a $53 million investment in an Infinity Q hedge fund as of January, its spokesman said by email.

Rudy Fichtenbaum, a newly elected trustee of the Ohio teachers' pension fund, said it appears to have lost $22 million in Infinity Q. "The problem with these illiquid private investments is the opaqueness which removes pension boards from exercising the appropriate level of oversight," he said. "I don't know who's equipped to vet these things, but I don't think these kinds of investments are where pensions want to be."

https://www.nbcnews.com/business/business-news/what-s-your-mutual-fund-collapse-infinity-q-warning-investors-n1277740