YouTube video (3 minutes) by Michelle Flanigan; active teachers need to see this one!

https://www.youtube.com/watch?app=desktop&fbclid=IwAR1c-LCCJoRRW6tJGPmbGJD6nVgQBCIDhC9lItdt6sFqmFYO

mAE3M_nBUVE&v=H9jRJvjdfQw&feature=youtu.be  

Use link above.

A message from ORTA Executive Director, Dr. Robin Rayfield

From ORTA Newsletter

August 2023

           

Greetings ORTA Members!

Wade Steen Update

A great deal has taken place over the last few months. As I updated you all in July, Governor DeWine has moved to replace Wade Steen as a member of the STRS board. As you may recall, Wade Steen has been the foundation for reforming STRS in an effort to bring back benefits that were promised to retirees and to ensure that active teachers receive a value that is commensurate with the contributions they are paying. When it became clear to the STRS staff that reform minded members would have a majority of the board, the governor intervened by ‘firing’ Wade Steen from his position as an STRS board member.

Although the governor’s reasons for this move have changed over the months since he removed Mr. Steen, there appears to be no legal avenue for him to make the move he made. Mr. Steen is fighting what he believes to be an illegal and politically motivated move by DeWine. Knowing that teachers, retired or active, have no better friend associated with our pension system, ORTA has pledged to assist Mr. Steen in his legal challenge. To date the Pension Defense Fund has raised approximately $30,000 to support Mr. Steen’s challenge. STRS has over $90 billion dollars to use in a fight to maintain control of the pension system that so richly rewards their poor performance, so the fight is an uphill battle. When one considers that the governor, with his political friends, and STRS with so much money (our money!) will do anything to remain in control of our pension, we certainly have our work cut out for us. I have talked with Mr. Steen recently and he informs me that his legal team is confident that the law is on his side. Mr. Steen is totally committed to seeing this battle to its conclusion. He is counting the days until he is able to get back to his work of fighting for educators in Ohio.

But we are EDUCATORS!

We are used to doing the impossible with little to no resources. We intend to EDUCATE Governor DeWine that he is not the Emperor of Ohio and that even he must follow the laws of Ohio! We intend to EDUCATE the management of STRS that they are no longer able to loot our system and take lavish bonus payments for mediocre performance! If you have not contributed to ORTA’s Pension Defense Fund, please do so now.

You may go online at https://www.orta.org/defense-fund and make your donation via credit card. Any amount helps. If you prefer to send a check to ORTA simply put Pension Defense in the memo and send it to: 

ORTA

250 E. Wilson Bridge Rd. Suite 150

Worthington, Ohio 43085

ORTA Officers for 2024

ORTA’s year begins each August and this year the ORTA Executive Committee welcomes a new member as says good-bye to a member that has served her term. Kara Mendenhall has served on the ORTA Executive Committee for the last 4 years. She began as the President Elect, moved into the President’s position, then served as Past President. ORTA thanks Kara for her service to its membership and wishes Kara the best!

Steve Seagrave moves into the President Elect position for 2024. Steve comes to ORTA from Delta, Ohio and is a member of the Henry Co. Retired Teachers Association.

Chris DeMarco from Portage Co. Retired Teachers Association completed his term as ORTA President and remains on the Executive Committee as Past President. Chris has been an outstanding member of the Executive Committee and his leadership is greatly supported by our membership. Dean Dennis has taken over as the ORTA President. Dean is well known to any STRS members that have followed the fight to restore benefits to retirees and restore the contribution levels and service requirements for active teachers. Dean has attended every meeting of the STRS board for several years and offers public participation comments each month. His understanding of how pensions work is nearly unmatched, even by the highly paid consultants STRS employees. Dean also offers an introductory message in this newsletter.

ORTA’s Endgame

I am often asked ‘What does ORTA hope to accomplish with its advocacy?’ I guess the answer is something like ‘We want what we were promised’. In order to get there, we need several changes at STRS.

First, we need transparency. It may surprise you to know that one board member (Wade Steen) asked fellow STRS board members to make changes in STRS policy that included language to increase transparency. STRS staff and a majority of the board refused to even include the word transparency in its policy book. Many of the problems at STRS that ORTA has brought to the table would be eliminated by STRS being more transparent. For years ORTA had asked STRS to video tape and make available the proceedings at STRS meetings. STRS management refused to do so for years. Just recently, STRS finally gave in and now broadcasts and makes available the proceedings at all STRS meetings. ORTA conducted a forensic audit of STRS investment operations. We wanted to know where our money was invested, what the fees, costs, and expenses associated with the investment program area, and what the actual value of our investments are. In other words, we wanted transparency in our investment program. STRS has refused to provide this information. STRS refuses to provide information on our ‘alternative portfolio’ which amounts to nearly $20 billion in assets. The same is true of our real estate portfolio which holds another $10 billion in assets. The loss of $550,000 in one alternative investment (Panda Power) was bad enough, however, STRS hiding this loss for years is unconscionable. ORTA has bemoaned the Performance based Incentive Program (bonus payments). No one can explain the payments of tens of millions of dollars to staff regardless of whether or not the investment program makes money or loses money. For example, last year the investment staff was paid about $10 million in bonus payments despite losing $3.3 billion dollars of our money. That was bad enough, but it gets worse. Using an accounting gimmick, the staff hid the real losses until after the bonus payments were made. The very next month, the actual losses of $5.5 billion were reported. Too late, the bonus payments were already paid! Board member Dr. Fichtenbaum has repeatedly pointed out that the bonus payments are made using ‘contrived’ benchmarks. It doesn’t seem to matter to the people looting our pension system.

Second, we need shared sacrifice from the people that work for us. Paying exorbitant salaries to so many people, while cutting benefits to retirees is inexcusable. Making active educators work 5 years longer and pay in more than the value of their retirement is inexcusable. Every teacher in Ohio began work understanding what they would receive when they retired. We all made the contributions as required, worked our careers and were promised a retirement benefit that would protect our purchasing power throughout our retirement. After retirement, however, STRS simply reduced our benefit. Many people decided to retire (on the advice of STRS counselors) based upon receiving a promised benefit only to have that promise broken. Active teachers taught for 2 decades and were making preparations to retire, only to find out that they would have to work 5 more years before they could retire. STRS needs to reduce expenses, period. Subsidized lunches, subsidized childcare, and health benefits for part time employees are a few of the more obvious things that could be reduced.

Paying ANY bonuses when he assumed rate of return is not achieved is out of the question.

Third, we need to change investment strategies. Repeatedly attempting to beat the market but failing to do so has cost STRS billions. Noted pension investment expert Richard Ennis recently wrote a paper that clearly stated that STRS investment ‘lost’ to a passive investment strategy 13 out of the last 21 years.

Overall, these losses, since 2009 have cost the pension fund over $12 billion. That amount lost to a passive strategy is greater than the amount taken from active contributors and retirees! Stop trying (and failing) to beat the market and invest passively. Eliminate most of the 125-investment staff and invest in the same asset classes through passive investment strategies.

STRS needs more money. Instead of trying to invest its way out of the mess they have created, STRS needs to put forth an effort to raise the employer contribution rate. At last count, STRS has the highest individual contribution rate and the lowest employer contribution rate in the nation. That is not a position to be in.

A message from new ORTA president, Dean Dennis

From ORTA Newsletter

August 2023

Greetings ORTA Members,

As your new President, I am grateful to the leadership of the Presidents before me, namely Bee Lehner, Kara Mendenhall and Chris DeMarco. I also want to acknowledge Robin Rayfield, ORTA's Executive Director, and Mia Landrum ORTA's Office Manager, who work tireless for our organization. My involved with this group of individuals has led me to my commitment to help ORTA with its mission to make our pension system more effective for Ohio's educators. I believe that ORTA's advocacy and monitoring of our pension plan will make a difference.

ORTA members, thank you for supporting our 76 year old organization and for your dedication to the teaching profession. Please know the ORTA office depends on the leadership, compassion and camaraderie found in ORTA's five regions and their local chapters.

Some background about myself. Both of my parents were the first in their family to go to college, both went into education and both drew their pensions from STRS. My dad grew up in rural New Holland, Ohio, and retired as a principal from the St. Bernard School District in Ohio. My mom grew up in Cincinnati and retired as a math teacher from the Finneytown School District. She also served as the local Finneytown Education Association (FEA) President. As a child, the first acronym I knew was "STRS" as my parents often talked shop at the dinner table. Growing up, my brother and I knew teachers didn't get rich. But we knew it was an honorable profession. In addition to teaching, I remember my mom taught sewing on the side and my dad painted houses. Our parents taught us that life was what you made of it.

I graduated from the University of Cincinnati with a Psychology degree and shortly thereafter obtained a Masters degree in Education. Armed with a degree I could actually use, I launched a 35 year career with The Cincinnati Public Schools. I began by career by teaching severe behavioral handicapped children.

Eventually, I became one of the first out of classroom Lead Teachers for the Cincinnati School district and oversaw the district's School Social Work Department. In between serving in this position, I served 10 years in the Cincinnati Federation of Teachers (CFT) office as a Field Representative. These duties included enforcing the Collective Bargaining Agreement and working with the district's CFT Building Representatives. When I retired in 2008, I was overseeing the School Social Worker Department again and serving as the district's court liaison. I also was serving as a CFT Vice President.

In 2010, I became aware of the planned Draconian cuts that STRS was going to present before the Ohio Legislature. Like many of you, I felt the changes were unfair for both active teachers and retirees.

However, what I really wanted to know is, how and why did this happen? I started attending the STRS Board meetings with Bob Buerkle, former CFT Retirement Chair, to listen for an explanation that made sense. There really weren't any good answers. Often I would sign up to speak to offer ideas or express my displeasure. I felt no one was listening and STRS management and the majority of our Board were modeling the definition of the word "inertia."

It was while attending these meetings, I got to observe Dr. Robin Rayfield representing ORTA. He would also address the STRS Board. Meeting after meeting Robin would ask the STRS, "what is your plan to restore benefits?" Robin was always polite but persistent. When he'd sit back down, on occasion, I'd walk behind him and say, "they aren't going to answer you, they don't have a plan."

But STRS did have a "plan." It was what they did. They simply cut and withheld benefits to compensate for their subpar investment practices that weren't able to keep pace with the payouts members were promised or expecting. My thoughts were, not paying what were once promised obligations isn't a plan, it's a failure.

The current problems at STRS are three-fold: 

1) The Employer Contribution rate has been locked at 14% for 40 years and they haven't made any lobbying efforts to increase the contribution rate.

2) STRS is actively managing their investments and continues to move more and more into risky Alternative Investments. These investments have too many non-disclosure agreements and hidden fees. Briefly, Alternative Investments are investments in which STRS is a Limited Partner but the monies are controlled by the General Partners. STRS cannot audit the value of these investments. It is questionable under Ohio Code 3307.15 whether these investments are even legal. STRS has approximately $20 billion in these investments.

3) STRS is dogmatic that their active investments outperform passive Index Investing practices. STRS states their case in the face of overwhelming evidence that demonstrates it doesn't. You may have read some articles written by Board Member Dr. Fichtenbaum and national investment expert Richard Ennis who challenge STRS over this issue. To form your own opinion, type into a Google Search, "How often do investment firms beat the market?" Keep in mind after your research that STRS earns their bonuses for beating their Benchmarks (which are tied to the market) 100% of the time.

So, here are my goals.

 1) Increase Awareness, Increase Membership. We need to focus on making sure our pension system works for all members. Other teacher state pension plans don't require working 34 years; most also have an inflation formula for making sure once retired, your pension isn't stagnant.

We need to move towards a goal of reduction in years required for full pension benefits which includes a COLA that protects a member's purchasing power. We will offer membership to active and retired teachers and let them know that our focus is to make sure STRS is maximizing contribution dollars and not wasting their dollars on hidden fees, non disclosure agreements and investments that cannot be independently audited.

2) Elect Board Members who share our goals of transparent investment practices and will question STRS spending practices that don't benefit members. We need Board Members who demand transparent investments and who are open to exploring to new investment approaches. We need Board Members who direct STRS Lobbyist to work for members.

3) Lobby the Legislature to increase the Employer Contribution. The STRS Employer Contribution has been at 14% for 40 years. Meanwhile, other non social security states like Ohio average around 23% for their Employer Contribution. The $3 billion gap between the STRS monies collected annually in contributions and the payout obligations to members is unacceptable. ORTA needs to take a leadership role in lobbying the legislature to increase the Employer Contribution. This is critical in order to restore what has been taken away from us.

Let's continue our momentum. See if each of you can recruit one person to become an ORTA member and start visiting our new website for updated information. 

My Best,

Dean Dennis

A message from Wade Steen to Ohio's active and retired teachers

August 16, 2023

Wade Steen has filed a lawsuit against Gov. Mike DeWine and STRS Ohio to be reinstated as a member of the STRS Ohio Retirement Board.

You can support Wade by donating to ORTA's Pension Defense Fund.

From Kathie: We need to do all we can to get Wade Steen reinstated to his rightful position on the STRS Board. Your future and mine may well depend on it. Any amount you can donate, large or small, will help!

The video may be viewed here. 

Please share!

Dean Dennis to STRS Board 8/17/23: "...in my opinion, when you are unable to audit 21% of the investments in our portfolio, they become illegal investments. I believe holding them in our portfolio is actionable."

Dean Dennis' Speech to STRS Board

August 18, 2023

STRS-August 17, 2023  Dean Dennis, Retired 35 Years Cincinnati Public Schools, ORTA President, Founder of STRS Ohio Watchdogs, Member of STRS MOF, Hamilton Co. Retirees Chapter and the CFT Retiree Chapter. 

What are risky investments? Perhaps investments with hidden fees and non-disclosure-agreements [NDAs] that not even our Board members are allowed to see. Such as the Private Equity [PE] investments found in our Alternative Investments portfolio. 

These risky investments were addressed in the 12/29/2022 State Auditor's Report.  Concerns were raised regarding fee disclosure. Page 24 of the report reads, "Given the longstanding issues about PE fee completeness, the Ohio legislature should consider legislation restricting the kinds of PE funds the state pension funds can invest in, such as requiring state pension funds to obtain certain fee disclosures that can be made public as a precondition to using an external asset management firm." 

Since 2010, our Alternative Investment portfolio has tripled from 7% of our portfolio to 21%.  It's problematic because we can't audit the fair value of this portfolio which accounts for approximately $19 billion dollars. Instead, we rely upon 130 General Partners to tell us the fair value of 130 investments. If you read an STRS Comprehensive Annual Financial Report, you might come across this disclosure, "Due to the nature of Alternative Investments, substantially all investments in this asset class are valued using market-based inputs that are comparable, but subjective in nature due to the lack of widely observable inputs."  Again, these investments are, "subjective in nature due to the lack of widely observable inputs." 

More questions about PE investments. In 2020, members raised $75,000 to conduct a Forensic Audit. The audit never was completed due to requested paperwork over transparency being withheld by STRS management. Benchmark Financial Services and STRS are now in a court battle over these transparency issues. Why are some Board members supporting legal efforts which hide fees and NDAs in our investments and obscure the fair value of these investments? 

There's a Code in Ohio. It's Section 3307.15 of the ORC. It is titled Investment and fiduciary duties of board. Section (e) of the code states, "Any statement of financial position distributed  by the board shall include the fair value, as the statement date, of all investments held by the board under this section."

In conclusion, Members of the Board, in my opinion, when you are unable to audit 21% of the investments in our portfolio, they become illegal investments. I believe holding them in our portfolio is actionable. An independent legal opinion needs to be sought as to if public monies can be used in investments which cannot be independently audited, have hidden fees and NDAs. This needs to become a top priority. Thank you.

Joan Bellner to STRS Board 8/17/23: the time for transparency is NOW

From Joan Bellner

August 17, 2023

My topic today is transparency.

Building transparency builds trust. If I, and the other members, are to feel secure in our pension fund, we need to be able to trust the Board and others within STRS.

At the March ORSC meeting, Auditor Faber told the committee that although their audit showed no evidence of fraud or illegal acts, they quote “did identify several governance issues that should be addressed”, including “management concerns and public policy concerns”.

(very eye-opening session to watch- archived on the Ohio Channel).

Faber requested that things be looked into and highly recommended that changes be made as soon as possible.

Afterward, STRS began touting the receipt of the newest 2023 StaRS transparency award from Faber’s office– seemingly claiming no need for improvement… until April 27th, when

Faber wrote an admonition letter to key players at STRS, asking them to stop claiming actual transparency.

Quote:      

      “For any person or organization to conflate our StaRS 
      (transparency) award with a determination of overall operational
       transparency is simply wrong (emphasis added) and may serve 
       to confuse the public (emphasis added). As noted in our special 
       audit, we strongly encouraged STRS to change its practices to 
       become more transparent with its STRS Board and members.”

Recently, at the STRS meeting in Maumee, there was somewhat of a 180° turnaround. The executive director publicly & wholeheartedly endorsed improved transparency, especially in regards to private equity and hedge fund fees. He stated that other staff support this initiative, as well, and that they currently are lobbying the SEC and legislators to do something about it.

Here’s my quandary: Moral and ethical people do the right thing, even when no one’s watching. They do not wait for an industry or the law to tell them they HAVE to do it… So, why are you waiting?

There ARE fees that CAN be shared publicly without interfering with purchases– or exposing too much information regarding our investment strategies, etc.

If I’ve heard correctly, most everyone in these rooms is in agreement that transparency– especially regarding fees– is good and desirable. 

So, again, why wait? Why waste time & money lobbying the SEC and legislators? Why continue to allow staff to rehash the same old defensive propaganda and statistics to make everything STRS does, including investments, sound (quote fingers) exceptional? 

All of that is just empty words. 

Something needs to be done. Just DO IT!

If Ohio can be first in so many things, including the first professional baseball team, the first laws protecting working women, and the first interracial college… then it can produce the first public pension fund to go public with all investment fees.

The time for transparency– in all aspects– not just those fees– is NOW. 

Don’t wait. 

Please, Board members, improve transparency with ALL of the management and public policy concerns raised by Faber in March.

Thank you.

Joan Bellner,  STRS Retired member

Michelle Flanigan to STRS Board 8/17/23: Consideration needed for a forgotten group of retirees; those who retire early for whatever reason

From Michelle Flanigan

August 17, 2023

Robin Beebe to STRS Board 8/17/23: Find your moral compass and do the right thing!

From Robin Beebe

August 17, 2023

My name is Robin Beebe. I retired 14 years ago after 35 years of JOYFUL teaching mainly fourth graders and kindergarteners, as well as a smattering of other elementary grades and 8 summers of Migrant Education. I taught for the Fremont City Schools and the Perrysburg Schools. My comments will be brief.

I stand before you not to go over and over and over the particulars of matters such as all the fraudulent altering and eliminating of our COLA's, the changing of working conditions mid-stream of active teachers as pertains to their 14% contribution rate and retirement formula years, the inept investments and massive losses, the lining of pockets with exorbitant salaries and bonuses, etc., etc.,...etc.....!

Both sides of this divisive glass wall know full well what is going on and being perpetrated by many of you STRS Board members.

Many of you sitting here before me have LOST YOUR MORAL COMPASS.

I ask you, how do you sleep at night? Deep down, you must know what fraudulent policies and plundering many of you have been an integral part of.

And so.....I implore you to find YOUR MORAL COMPASS and DO THE RIGHT THING!!!

Thank you.

Suzanne Laird to STRS Board 8/17/23: If someone tries to convince you these cost cutting measures are too sudden, please remind them that they ripped the COLA right out from under us, without any warning.

From Suzanne Laird

August 17, 2023

Good Morning, Members of MY Board: 

Today, I’d like to direct my remarks to our newest appointees:

Look, I know the last thing you wanted was to be assigned to another committee or Board, but I’d like to think that you might feel this is one of your most important assignments. The future of education in Ohio really is in your hands!

As I asked in May, why would anybody choose to be a teacher in Ohio when they see their STRS Board voting for excessive raises and bonuses? You have the opportunity today to stop the nonsense, and I believe your own bosses would agree. DeWine claimed he was “for teachers” and Auditor Faber stated that the “bonus system needs to be re-examined.” (You left that out of your podcast, sir.) Wouldn’t the Ohio House, Senate, Treasurer and Superintendent of Education be impressed if you took your red pens and slashed the hell out of this bloated budget?

Need a red pen? We “retired” still have ‘em in the bottom of our purses. 

I’m serious. We haven’t a moment to lose. The new school year has just begun, and there are too many unfilled positions. No one wants to relinquish 14% of their salary to this outsized staff. One hundred investment “bros”? Cut them by half.

Retrain the childcare workers and fitness folks to handle appointments, since teachers seeking an appointment right now have a three month wait. I’ve asked for an appointment every month since February with a certain Fred Williams, who is unavailable or leaves here before I do every Board meeting day.

Your own security staff thinks it’s crazy that you pay three of them every night when you’ve got crash-proof gates!

If I can name these cuts off the top of my head, I’m sure you, who have more experience, can uncover more. Do the job you’re being asked to do.

If you need more suggestions, I’m available, Mr. Minister of Propaganda…… 

This brings me to our out-going Board member. Examine your conscience and remember those who put you here. You could redeem yourself today with a “no” vote.

If someone tries to convince you these cost cutting measures are too sudden, please remind them that they ripped the COLA right out from under us, without any warning.

Do your fiduciary job.

Bob Buerkle shows the STRS Board how STRS beneficiaries have been winners, then losers: read it and weep!

From Bob Buerkle

August 17, 2023

[Note: the first page is a condensed version of the following three pages.]

Cathy Steinhauser reminds the STRS Board 8/17/23: "... you are supposed to be doing what is right for the teachers in this pension, not the STRS staff, not the investment staff, not your family and friends...ONLY THE TEACHERS."

From Cathy Steinhauser

August 17, 2023

Robin Rayfield to STRS Board 8/17/23: How is it possible that, regardless of what the data show, and regardless of what many 'experts' tell us, STRS management is never wrong, never underperform, and always exceed their benchmark?

From Robin Rayfield

August 17, 2023

Who's wagging whom?

Thanks to John Curry for this gem!

August 15, 2023