My letter to Sen. Andrew Brenner 02/24/22; please support S.B. 280

Dear Senator Brenner,

I am writing to respectfully urge you to support S.B. 280, which would restore a COLA to Ohio's retired teachers. I taught in Ohio over 30 years, retiring in 1998. When I retired at age 60, I was promised a COLA, and was counting very much on it to provide a comfortable retirement for myself, especially since I've been widowed for many years, relying solely on my income to make it through the rest of my life. Having STRS cut off my COLA has hurt very much. 

My pension has now been flatlined for five years, and I am feeling the pain with inflation raging out of sight. I will be 84 in less than three weeks. I can't go back to work now. Since our COLA was cut off so abruptly, I and many other retirees were caught in the lurch, not given enough time to make other plans for our future. We are hurting.

I am counting on you to please support S.B. 280 to restore the COLA to STRS retired teachers. I don't expect to be around many more years; I need my COLA now. Your help would be so much appreciated by me and by thousands of other retired teachers. We didn't make big salaries to begin with. and we put thousands of our hard-earned dollars into the pension fund for our retirement, not expecting to have the rug pulled out from under us. I feel helpless and betrayed by my pension system. Please help us; we want only what is ours, no more.

Thank you. 

Katherine B. Bracy

ORTA Executive Director Dr. Robin Rayfield's Message in February 2022 ORTA Newsletter

February 24, 2022

ORTA Newsletter

STRS News 

There seems to be some movement at STRS related to our COLA. Several options were discussed, in depth, January 27th at a special meeting of the STRS board. The basic ‘concepts’ that have emerged include: 

● Providing a one-time COLA of 2% to retirees. This increase would be provided to each eligible retiree and would remain in effect each year. To be clear, each retiree would receive a 2% increase (on their base retirement) for the remainder of their life. That 2% increase would be a one-time increase. 

● Reducing the contribution rate paid by active teachers. Currently our active teachers pay the highest rate of contributions in the nation. Their contribution rate is higher than the value of their pension. 

● Reducing the 'age requirement’ for full benefits. Maybe allowing full retirement after 35 years of service. 

I am of the opinion that the hard work and advocacy done by ORTA, and members of the Facebook groups have had an impact on this issue. Between the forensic audit, the special audit by the auditor of state, the recent activity on ORTA’s YouTube channel, and ORTA’s work with legislators in Ohio, STRS has determined that some form of COLA is in order. Is it a coincidence that STRS is thinking about a COLA and reducing the burden on actives at the same time as STRS Trustees stand for election? Where do things stand with regards to our pension and our benefits? Well, we learned a great deal about STRS because of our grass roots funded Forensic Audit. Mr. Siedle confirmed what many people had suspected for a long time. There are serious problems at STRS. What problems you may ask? 

● STRS remains cloaked in secrecy with regards to their investments. The fees paid to outside firms are not reported and often the returns are reported inaccurately. Investors (STRS members active and retired) are not allowed to know how much is invested in each of the 135 alternative investment accounts. Further we are not allowed to know what the fees, expenses, and costs associated with each of these 135 alternative investment accounts are. Finally, we are not allowed to know the value of any one of the 135 alternative investment accounts are. With over $15 billion in the alternative investment category, we should know where our money is and what fees we are paying. Benchmark Financial has requested information from STRS but has been stonewalled for over a year. The Ohio Supreme Court is currently reviewing the request for information regarding our pension’s investments. 

● STRS continues to ignore findings from the 2006 fiduciary audit and pay bonuses to the investment staff based upon actual performance instead of using an external benchmark. 

● STRS continues to take on a high level of risk when compared to the level of return. 

● Other findings of concern identified in the Siedle Report include; payment of committed capital fees, carried interest fees, and failure to monitor consultant conflicts of interest.

ORSC Audits 

Many retirees know about the ORSC [Ohio Retirement Study Council] and what this body does. For those that do not know what the ORSC is and what its function is I offer the following explanation. ORSC is a group of legislators and political appointees that are charged with oversight of the 5 public pension systems in Ohio. One way the ORSC conducts this oversight is through ‘audits’ of each pension system. By law, ORSC is required to conduct an actuarial and a fiduciary audit of each system at least once every 10 years. STRS last audits by the ORSC were in 2006. Our audits are going on 6 years overdue! This lack of oversight by our elected officials has costs the pension significantly. For example, in 2006 STRS was advised not to use ‘actual performance’ of the investment staff as a benchmark for earning bonus pay. STRS ignored that recommendation and has used ‘actual performance’ as the measuring stick to determine bonus pay for investors. As of 2021 actual performance was used to determine bonus pay. I guess what this tells us is, ORSC utterly failed in its responsibility to provide oversight to the public pension systems.

Local 

Many local chapters of ORTA have scheduled meetings for the spring of 2022. I have a busy spring of visits to chapters all across Ohio. Please contact the ORTA office if you would like to have someone from ORTA visit your chapter. 

ORTA to Engage in STRS Trustee Elections 

ORTA has arranged a committee to sit down with candidates for STRS trustees seats. In early March those candidates that wish to be considered for ORTA’s endorsement will be interviewed. After interviewing candidates, those that earn an endorsement will be endorsed. ORTA will announce these endorsements in March, well before the election in late April early May.

Martha McFerran to STRS Board, February 17, 2022: Stop stealing from us

I am Martha McFerran.  I retired from Columbus City Schools and worked at OSU.

Good morning, especially to the teachers who have traveled to be here.

Retirees and working teachers are united by your betrayal of us.

Hundreds of us have come to respectfully testify here before you.

I am in awe of their politeness…

in the face of your theft of their lives and funds…

in the face of your failure to provide for retirees while enriching yourselves.

Teachers have walked in here patiently…

citing statistics on outrageous fees.

Monthly, teachers come in here to document the harm you have done…

to present the shocking findings of an independent audit,

by a national expert in pension fraud…

asking for transparent accounting of funds and spending…

OF THEIR OWN MONEY!

 

I admire teachers’ civility…

their composure as they speak through their betrayal, anger and fear.

They document how you have ruined and continue to ruin the STRS brand.

They explain how we relied on that brand when planning our lives…

believing the experiences of our aunts and mothers… our uncles and fathers…

who taught English, math, industrial arts and technology.

 

You brag about members over 100 years old…

What would their lives have been like without multiple cost of living increases?

Your own economist forecasts inflation…

but you cannot provide a COLA for us….

even as other Ohio pension systems and Social Security do so.

The independent report shows the amount you mob have spent on fees could pay for COLAs.

 

YOU HAVE FAILED.

The only “benchmark” you should have is whether you’re taking care of us.

You’re not.

We work longer, pay more and get less…

While you pay outrageous fees and collect obscene bonuses.

 

And, don’t try to make yourselves feel better…

Because some retirees have other income…

For many, lot of us women…

this is all we have!

 

You are not working for Wall Street or on Wall Street.

You are working for the teachers of Ohio, a not-for-profit entity.

 

No one should have to come down here to tell you how to do this work.

We delegated this work to you like calling the plumber or dropping off the dry cleaning.

You’ve had 30 years. 

You can do better.

 

Winter has come.

And so has the State Auditor, Ed Siedle, Colleen Marshall and the members.

 

Stop stealing from us.

Bob Buerkle's speech to STRS Board 02/17/22: Sometimes watching how STRS management and their advisors operate is like watching someone play “Whack-A-Mole.”

From Bob Buerkle

February 17, 2022

Sometimes watching how STRS Management and their Advisors operate is like watching someone play “Whack-A-Mole.” By the end of the 2012 FY, just 3 years after the 2008-09 Great Recession, STRS was on its way to recovery, earning a 3-year return of 12.51%. Then Whack; they dropped the 8% discount rate that had been in effect since the last recession was over and lowered it to 7.75%, then Whacked the current retirees; eliminated their COLA for a year, as of 07/01/2013, then brought it back at a reduced rate of 2%. 

Now on to the future retirees. As of 08/01/2013 the new STRS retiree rule began; no COLA for you for sixty months, Whack! That’s not enough punishment, Whack them again, and here we are 103 months later and they’ve never received their first COLA. These Whacko changes, this theft of our promised pensions, according to the 2013 CAFR, accounted for the bulk of the $15.7 billion in reduced STRS liabilities.

Beginning in 2015, after the funded ratio had improved from 56% to just under 70%, the active teachers were Whacked again and made to work an extra 5 years, phasing in one more year for each 2 years going forward. And if they were less than age 50 in 2015, well Whack them again and make them work until age 60, plus also have 35, 36, 37, 38, 39 years of service; whatever!

In the 2017 FY, when STRS had just earned 14.29%, they dropped the discount rate again, this time to 7.45%. This added another $6.5 billion to the pension debt. No matter, just Whack the retirees again, eliminate their COLA. And it is still missing five years later.

So, in the 2021 FY, the total STRS investment returns earned 29.16%, producing about $22 billion in new assets. Can’t have that.  Have to hide it. Got to do something quick. Call Callan, call Cheiron. Let’s tell the Board they have to lower the discount rate to 7%. That subtracts another $4.333 billion from the assets.  Put $8 billion into the smoothing reserves. Don’t restart the COLA, that would cost money. Even after all of this Whacky manipulation STRS still has a funded ratio of 87.8%, a funding period of just 14 years, and ranking first of all the Ohio Pension Plans, yet the only one which says they can’t, and are not, paying for a COLA.

Let me tell you what Jim Miller, the former Director of STRS Governmental Relations until about the 2000 fiscal year, used to explain to the OFT Retiree Committee. Paraphrasing, “you don’t want the pension system to become 100% funded because the legislature might very well look at STRS and Whack us as the designated Piñata.”