Dean Dennis' speech to STRS Board February 16, 2023

February 16, 2023 Dean Dennis, retiree 35 years of service.

Normal Cost is generally defined as the contribution amount to cover retirement benefits earned in any given year under the plan's funding policy. The normal cost "prefunds" or "pays in advance" for the promised pension benefits.

Last year, the STRS Board's actuary determined that a normal cost of 11.09% was necessary to prefund this future promised pension benefit. Of note, our active teachers pay an Employee Contribution of 14%. This makes them the only public employees in the nation whose contribution is higher than their normal cost. Why is this? It's due to mismanagement.

Here are some facts. Ohio's retired teachers and perhaps Louisiana's retired teachers are the only teachers in the nation who don't have any inflation protection. Ohio teacher's 14% Employee Contribution is the second highest in the nation. Ohio teachers work more years than other teachers in the nation for a full pension, then are on a path of financial decline after retiring. Ohio teachers and retirees deserve better. They have a really bad deal. Really bad.

It's hard coming up to Columbus year after year, as inflation eats away at our pension, and listen to STRS tell us how fortunate we are to have an in-house-staff who has saved us so much money. And then, we get to watch 6-figure investment staff bonuses be approved. We listen to our Trustees being told staff has beaten their Benchmarks. Then we watch our Trustees try to understand the Benchmarks. Staff also tells trustees and members, their annual investment costs of 11-12 basis points, are way lower than their peers. Then we learn their reported annual investment costs are different in the CEM report; and then we learn they are different in the ORSC (Ohio Retirement Study Council) report. Lastly, how about learning about the half-billion dollar Panda loss three years after Panda went bankrupt?

I live in Cincinnati, we had a football team (Bengals) who went 31 years without winning a playoff game. The fans were ready to mutiny. Then on January 15, 2022 the team finally won a playoff game. The Bengals even ended up going to the Super Bowl. This, however, occurred only after a decision was made two years earlier to hire new coaches and change direction.

Trustees, STRS is being bailed out on the backs of the people you represent. You know this. That said, nothing different seems to be happening. There is no change of direction. It's time.