Why Bob Stein resigned from the STRS Board

From Bob Stein to Dean Dennis

Sent: Friday, January 14, 2022 5:37 PM

Dean

Responding to your query.

My reasons for resigning my seat on the STRS board include:

1.    The character of the board has changed over the last few years.  When I first took my seat in 2009, board members were willing to discuss challenging and uncomfortable topics with the goal of preserving the system.  Everyone was focused on perpetuating a valuable pension along with a meaningful health care subsidy.  It was always about ideas and not personalities.  People with different politics or who disagreed on topics would work together to use their diverse backgrounds to better understand STRS’s environment and try improve the quality of proposals before they came to the full board.  This continued for about 9 years.  I no longer saw that kind of cooperation by the time I resigned.

2.    Since early 2020 I had been researching an improved version of an investment proposal I first made to the Chief Investment Officer in 2009.  Changes in the structure of the 2009 proposal as well as changes in the global economic environment following the GED made the new version much more workable and very attractive. Since the ideas spanned more than one STRS division, I believed investigating the ideas was the responsibility of the entire board rather than just specific staff.

3.   Cliffwater, the board’s consultant for alternative investments, did not provide a requested due diligence report at the February 2021 executive session. After hearing demonstrably inaccurate and faulty advice from the system’s external Alternatives investment advisor, the board refused to consider, or even hear correct details of, the improved idea or how it might be responsibly investigated.  I was personally attacked for advocating the investigation and the executive session was ended prematurely.

4.   I became convinced that the relationships between STRS and at least some of its advisors were not being well managed.  The February executive session showed that my board contributions were no longer sufficiently valued to allow me to ameliorate the situation. I concluded that I could be of better service to STRS and the broader human enterprise by following a different path.  There was an STRS election in progress and my legal advisor recommended that I postpone my resignation until after the election results had been adopted by the system.

5.    After considering further legal and other advice, I thought that I would be better able to more thoroughly investigate the new idea if I were not a member of the board.  I reasoned that if I personally collected deeper information the board might respect the length and quality of my service enough to at least listen to a report and consider initiating their own independent investigation.

I had planned to devote the rest of my retirement to service on the STRS board.  In leaving this board I believed I could be of more value to STRS beneficiaries.

This is additional background information for you that does not relate directly to your question about my decision to leave the board. I believe it validates my reasoning in resigning. 

After leaving the board, listening to the board’s investment seminar in September 2021, the staff and Callan made several “we don’t understand” statements and offered speculation that included examples that were the opposite of those I had verified. These included a discussion on the lack of value in buying leverage and liquidity throughout market cycles when several of the proposed strategies involve selling leverage and liquidity at specific parts of market cycles.  I considered these as demonstrations and admissions that they indeed did not understand the fundamental ideas or what business model was being proposed. 

I expected the board to see the inconsistencies and be looking for a way to better research the topic using unconflicted specialists. Cliffwater did not attend the annual investment seminar and they couldn't be questioned on the matter.  These shortcomings encouraged me to agree to provide my research insights when asked.  However, the presentation didn’t go as expected. 

The November 2021 board meeting was an embarrassment of coordinated obstruction in support of an unsustainable status quo.  Several present assigned inaccurate statements to myself and other presenters and expanded on the inaccurate and internally inconsistent statements from the September investment seminar and the personal attacks from the February 2021 executive session.  The board broke executive session privilege without a vote and Cliffwater presented a revised inaccurate list of its objections from the February executive session.

Cliffwater left the meeting as soon as it became known that its statements to the board demonstrated a conflict of interest and differed from those it made during due diligence interviews.  Several board members were uninformed and confused enough to behave unprofessionally.  It’s one thing to reject an idea once you understand it.  It’s a breach of fiduciary duty to refuse to hear an idea or force the conversation into an arena where the idea can’t be heard without depreciating its value to the beneficiaries of the system.

I hope this helps.

Best

Bob Stein

On 1/11/2022 2:25 PM, Dean Dennis wrote:

Bob, thanks for the conversation this afternoon. 

As discussed, I periodically see a lot of speculation on Facebook as to why you resigned after winning your seat. I think it would be beneficial to you and to others to hear an explanation from you.  Feel free to write something I can post in its entirety and share; or something I can use to jump into a FB conversation, for use, if I think comments about you are out of bounds.  I either case, I want to be able to state I reached out to you and this is what you shared.

Again, thank you for your dedication while on the Board and your concerns and input afterwards,

Dean Dennis

Attention teachers, active and retired: your future is at stake and being dismantled piece by piece by STRS

 

Teachers, pay attention: These OEA-endorsed STRS Board members have done NOTHING for you! They have done NOTHING to reduce the active teachers' humongous 14% contribution to STRS. They have done NOTHING to reduce the number of years you must work to earn a full retirement. They have done NOTHING to reinstate even a small COLA to retirees, whose cost of living is SOARING while their pension remains flatlined, due to GROSS MISMANAGEMENT of STRS. To support ANY of these DO-NOTHING candidates is to vote for a dire future for yourself. OEA has done NOTHING to help your situation, have they? What are active teachers even getting for their huge annual dues? NOTHING!!! That money goes right into the pockets of a huge number of OEA people who are supposedly helping you, and making huge salaries (many are six figures), thanks to you. Are they, really helping you? You be the judge. Educate yourself and spread the word. Join the Facebook group Ohio STRS Member Only Forum if you haven't already, and want to know what's really going on at STRS. Or read this blog; it's all there. And, for heaven's sake JOIN ORTA! Robin Rayfield is knocking himself out traveling all over the state to enlighten as many STRS stakeholders as he can about our plight. He is a hugely strong advocate for ALL of us, active AND retired teachers! (Actives can join ORTA for $10 a year.) We are all in this together; we ALL need to get on board to reform STRS (and OEA, for that matter!!) and save our future before they wreck it any further! It's costing each and every one of us THOUSANDS.  It's time to WISE UP!

Press release from State Senator Teresa Fedor: Legislation introduced to reinstate the COLA for retired teachers

State Senator Tersa Fedor introduces SB 280 to reinstate the COLA for STRS retirees

 From Cindy Murphy

January 12, 2022

Today, state Senator Teresa Fedor (D-Toledo) introduced Senate Bill 280, which would reinstate the cost of living adjustment (COLA) for retirees in the State Teachers Retirement System (STRS).

“This bill fulfills a promise made to retirees’ years ago,” Fedor said. “With inflation at an all-time high, retirees living on a fixed income need this adjustment more than ever. Though this increase does not make up for all the money they have lost over the years, it is still the right thing to do.”

Long title: To amend section 3307.67 of the Revised Code regarding adjustments by the State Teachers Retirement Board to the cost-of-living adjustment. 

Primary Sponsor(s): Senator Teresa Fedor

Cosponsors:

Senator Kenny Yuko

Senator Nickie J. Antonio

Senator Tina Maharath

Senator Cecil Thomas

Senator Hearcel F. Craig

Senator Sandra R. Williams

Senator Vernon Sykes

Edward Siedle: Facebook Pension Groups Are Doing Work Unions Should Be Doing To Protect Retirement Savings

Facebook Pension Groups Are Doing Work Unions Should Be Doing To Protect Retirement Savings

https://www.forbes.com/sites/edwardsiedle/2022/01/11/facebook-pension-groups-are-doing-work-unions-should-be-doing-to-protect-retirement-savings/ 

Forbes
January11, 2022

Edward Siedle

Contributor

Retirement

Pensions/forensics expert and record-setting whistleblower award winner

Facebook Pension Groups Are Doing Work Unions Should Be Doing To Protect Retirement Savings

My experience this past year conducting a forensic investigation of the State Teachers Retirement System of Ohio on behalf of the 20,000 member-strong Ohio Retired Teachers Association has convinced me that Facebook groups can be a powerful force to combat looting of America’s pensions by Wall Street. In Ohio, two Facebook groups, Ohio STRS Members Only Forum (19,000 members) and the STRS Ohio Watchdogs (7,000 members) are vigilantly exposing gross mismanagement at the STRS Ohio pension identified in a forensic investigation I completed.

Long before U.S. intelligence agencies identified Facebook as a battlefield for information warfare and foreign interference in the 2016 election, the company was criticized for the harm it did including failing to stop the spread of extremism, hate speech, propaganda, disinformation, and conspiracy theories on its site. The 2012 post Top 10 Reasons Why Facebook Is The Devil includes alleging “it does nothing but incite envy, fake-ness, impulsivity, over-disclosure, jealousy, rage, picture-taking, hatred, loneliness and desperation.”

Last month Adrienne LaFrance in The Atlantic wrote, “In recent years, as Facebook’s mistakes have compounded and its reputation has tanked, it has become clear that negligence is only part of the problem. No one, not even Mark Zuckerberg, can control the product he made. I’ve come to realize that Facebook is not a media company. It’s a Doomsday Machine.

I have written in Forbes about being suspiciously blocked by Facebook from posting my widely disseminated articles in pension group discussions for somehow “violating community standards.” How can an article about pensions suitable for publication by Forbes.com violate a pension group’s community standards? Requests for explanation or reconsideration have gone unanswered.

Most recently I exposed an apparently fake Facebook account that was attempting to discourage Ohio government workers from donating to a GoFundMe campaign to conduct a forensic investigation into potential mismanagement at the $100 billion-plus Ohio Public Employees Retirement System (OPERS).  The fake Facebook account has disappeared without explanation; the GoFundMe campaign for an OPERS investigation is ongoing.

On the other hand, my experience this past year conducting a forensic investigation of the State Teachers Retirement System of Ohio on behalf of the 20,000 member-strong Ohio Retired Teachers Association has convinced me that Facebook groups can be a powerful force to combat looting of America’s pensions by Wall Street. In Ohio, two Facebook groups, Ohio STRS Members Only Forum (19,000 members) and the STRS Ohio Watchdogs (7,000 members) are vigilantly exposing gross mismanagement at STRS Ohio identified in a forensic investigation I completed.

It’s no secret that most of our nation’s remaining corporate and government defined benefit pension funds are grossly underfunded. Not surprising, the single greatest concern of pension participants today is whether the pensions they rely upon for their retirement security are prudently managed and if pensioners will receive all the benefits they have been supposedly promised.

While for over two decades I have implored unions to get actively involved in scrutinizing the management of pension investments—serving a watchdog function which pension boards are ill-equipped to perform—rarely have I been successful in persuading these unions that the best way to preserve pensions is to expose and address problems, not hide them. Unions tend to believe that any criticism of pensions will only lead sponsors to no longer offer them to workers.

According to Dean Dennis, who began working with others (including Joe Lupo, Bob Buerkley, Robin Rayfield, Kathie Bracy, John Curry, John Bos, Jan Stewart and Cindy Murphy) on the two Facebook groups in 2019, the effort began with petitions posted on Facebook. Petitions, such as STRS Ohio, It’s Our Money, Adopt A Reasonable Investment Return Assumption (7,000 signatures) and Respect Ohio’s Retired Teachers, Restore Their Promised COLA (46,000 signatures) incited teachers, as did speeches detailing problems within STRS Ohio. Outreach to media and informing members of a class action lawsuit against STRS Ohio alleging violations related to elimination of the promised Cost of Living Adjustment were also critical. 

Read the rest of the article here.

Robert Sprague: WHAT ARE YOU HIDING?

Ohio Treasurer Robert Sprague: Ohio's Teachers Deserve an Explanation!

Ohio Treasurer Robert Sprague has chosen not to reappoint Yoel Mayerfeld to the Board of the State Teachers Retirement System of Ohio. Treasurer Sprague's actions disappoint many STRS Ohio members who applauded Yoel Mayerfeld's efforts to hold the Neville Administration accountable. 

Working  with fellow Board Member Wade Steen, Mr. Mayerfeld was instrumental in exposing the granting of millions of dollars in performance bonuses to investment staff tied to faulty benchmarks. Mr. Mayerfeld served the Treasurer's Office well.

Members of the Ohio STRS Member Only Forum and the STRS Ohio Watchdogs demand that Ohio Treasurer Robert Sprague make a public statement letting members know that he is aware of problems within the Neville Administration and is committed to working to resolve these problems.  

Contact Ohio Treasurer Robert Sprague: Robert.Sprague@tos.ohio.gov 

From Cindy Murphy, 01/07/22

Petition for Robert Sprague

Link to petition demanding that Ohio Treasurer Robert Sprague make a public statement letting members of the Ohio STRS Member Only Forum and the STRS Ohio Watchdogs know that he is aware of problems within the Neville Administration and is committed to working to resolve these problems. 

https://www.change.org/p/ohio-treasurer-robert-sprague-ohio-s-teachers-deserve-an-explanation?signed=true