Dan MacDonald reminds STRS of their blatant, irresponsible mishandling of stakeholders' funds

Dan MacDonald's Speech to STRS

August 15, 2024

Mr. Chair and members of the Board, good afternoon. I am Dan MacDonald, an STRS retiree with 38-plus years of service.  I am also the Executive Director of Local 279R, Northeast Ohio AFT retirees.

I attended a Geauga County retiree meeting last week.  About 60 people were in attendance.  After reminding them of this week’s STRS Board meeting, hands went up.  Expressions of disappointment were shared with me on this Board. Their feelings of promises made but not kept. There is a vast difference between many urban/suburban districts and rural districts. Final salary averages in rural districts are often thousands of dollars less. You already know that, but anger and sadness exist in these counties.

I do not know why I haven’t truly realized the following - I’ve been attending these meetings for years.  I’ve been staring at the proposed 2025 Budget May 16th document all summer. In 2023 $44.3 million dollars were spent on internal management expenses.  I figured that included the 2022 PBIs.  Assets managed were $60 BILLION plus.  External management expenses were $256 million.  Assets managed $30 BILLION plus.  I figure all the consultants' fees are part of this number, but still external managed is almost 6 times more expensive for handling half the assets.  Either the consultants are super expensive, or the external managers really have huge fees.  Has anyone compared the return of external funds to internal funds?  I do not remember such a report; everything seems always to be lumped together.  Maybe our investment department should be looking to take over some of these external investments.  Bring that $256 million price tag down.

Also in some past meetings, a 13th check and a COLA have been discussed and Cheiron directed. Personally, probably not my memberships train of thought, a 13th check adds nothing to our yearly pension.  It is a one-time only.  Personally, I would like the Board to see how this new fiscal year plays out financially before promises are made.  Springtime tells us pretty much how FY 2025 is going, up or down.

As always, actives need their futures enhanced and retirees need their COLAs.

Thank you for the morning session that addressed the pension funding policy.  First steps.