Robin Rayfield's update on STRS and announcement of new ORTA officer Dean Dennis

From ORTA's May 2022 Newsletter

Robin Rayfield's Update on STRS

May 25, 2022

STRS News

STRS Election is over. The STRS board will see 3 new faces in September. Although the ‘momentum’ appears to be for change at STRS, please remember, the new trustees will not bring bags of money with them to fix things. Hopefully, they bring questions about the way our pension system operates. I know each of them pledged to bring transparency to our pension system. 

Something very important to note is that ORTA observed a great deal of interference from STRS staff in attempting to influence the election. Some of the more obvious attempts to influence the outcomes include:

• Sending emails to all STRS members offering commentary on the performance of the STRS investment staff. These emails were, apparently, sent in response to anonymous emails sent that challenged the ‘value’ of an STRS pension. These emails inferred that the current board is the reason STRS is able to offer a one-time COLA.

• Executive Director Neville’s unannounced presentation at the April Board meeting including a message that the STRS investment team is outperforming an indexed benchmark and has been transparent with information related to investment performance. This presentation was designed to demonstrate that the current leadership at STRS is doing a great job and should be rewarded with re-election.

At the April 2022 meeting of the STRS Board a proposed budget was submitted by STRS management. Interesting that the budget request included a 6% increase in wages for the employees, a 5.5% increase in fringe benefits, and increases to the performance-based incentive program (bonus pay). It was explained that about half of the 6% increase request for salary increase is due to the need to pay employees 27 pays instead of 26 pays. As I recall this calendar occurrence every several years, my district simply notified all employees that there would be an extra week between paychecks. I am seeking clarification from school treasurers that I know to help me understand things related to this issue more clearly.

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New President Elect 

Mr. Dean Dennis was elected to the ORTA Executive Committee as the President Elect of ORTA. Dean will serve as the President Elect in '22, then as President in '23, and finally in the Past President position in '24. 

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STRS Retirement Board Election Result 

On Saturday, May 7, 2022, the results of the State Teachers Retirement Board election were certified by a board of tellers appointed by the State Teachers Retirement Board and Election Services Company — the independent firm administering the election. The results of the election for the two contributing member seats on the Retirement Board are as follows:

• Julie Sellers, 19,030 votes
• Steven Foreman, 15,247 votes
• Jeffrey Rhodes, 10,494 votes
• Robert A. McFee, 9,817 votes
• Write-Ins, 319 votes

The results of the election for the retired member seat on the Retirement Board are as follows:

• Elizabeth Jones, 24,983 votes
• Rita J. Walters, 21,229 votes
• Write-Ins, 222 votes

The term of office for Steven Foreman, Elizabeth Jones and Julie Sellers will begin on Sept. 1, 2022, and will end on Aug. 31, 2026. (from STRS web page) 

What does this mean?

This means that STRS will have three new trustees starting in September of 2022. ORTA is convinced that the fact that three challengers defeated three incumbents signals that all STRS members, active contributors and retirees feel like new leadership is in order. What is important to note is that this vote says far more about the employees that reported to the trustees than it says about the trustees themselves. People are simply fed up with the management at STRS. Members have no control over the employees, except to elect new board members. Just like when I served as a superintendent of a school district, board of education seats are not about the volunteers that serve as board members, they are about the community’s satisfaction with the leadership of the district. The same rings true in this situation. 

The membership is not angry with the incumbents that were voted out; they are frustrated with the fact that the board members would not hold the management to account. We must recognize that holding a management team to account is very difficult, even more so when the management team does not share information critical to the fiduciary role a board member is responsible for. Current board member Wade Steen has voiced his concern that when management will not share information related to investment performance and bonus pay that his role as a fiduciary is difficult or impossible. We are hopeful that these election results will enable all board members to feel free to question the management team and hold them to account.

Robin Rayfield, ORTA Executive Director