Robin Rayfield: The corrupt nature of the governor and the AG are a threat to our pension

From ORTA Blog

August 25, 2024

By Robin Rayfield

When the attorney general makes threats to remove a board member, everyone must consider that threat carefully. After all, the AG is currently attempting to remove two STRS board members based on an anonymous letter received. 

The summer has been active for the STRS pension system. There were a couple of resignations from the board (Dale Price and Steve Foreman) with replacements being named. 

Michelle Flanigan is replacing Dale Price. Michelle’s term began a month early in August of 2024 and runs for 4 years. Mr. Foreman retired from education, so he was forced to give up his active seat. Mr. [Mike] Harkness replaced Steve. He is an active contributor from Akron and will serve out the remainder of Steve Foreman’s term. 

This summer also witnessed a great deal of scrutiny concerning the PBI (bonus) system at STRS. In June, the board failed to approve the bonuses for the investment staff at STRS. Then, in July a special meeting was called to discuss the status of the PBI payments. After being threatened by the A.G.’s office the board reversed itself and approved the payment of the bonuses. 

Of course, many people who follow this closely felt betrayed by the reversal. Many comments on social media were not kind about this action. However, I must caution those who are critical, that threats made by the attorney general of Ohio are not to be ignored or taken lightly. When the AG makes threats to remove a board member, everyone must consider that threat carefully. After all, the AG is currently attempting to remove two STRS board members, based on an anonymous letter received. 

The corrupt nature of the governor and the AG are a threat to our pension. 

Perhaps a light at the end of the tunnel for our pension system is the recent action by STRS to hire a governance consultant. Hopefully, the board will hire a consultant who is not hand-picked by the management staff at STRS. Having an independent voice in the leadership at STRS will lead to better outcomes. 

What is interesting to note is that, since STRS membership, both actives and retirees, have voted in reform-minded candidates, the management and status quo members of the pension system have gone to extreme lengths to fight against reform. For decades upon decades the management team at STRS have paid themselves bonuses, have underperformed a passive index, have ignored their membership, and have refused to change anything. 

As the reform movement began to gain seats on the board, management saw the threat to their way of life and sought to call upon the governor, then the AG, to maintain their grip on the billions and billions in our retirement system. 

I recognize that the reform isn’t happening as fast as we might like, but reform is coming. Have faith that what is right and just will win out in the end. 

Another positive discussion from the STRS meeting in August comes from the STRS policy discussion. The board is currently looking at restoration of the promise of colas for retirees and for fewer years of service for active teachers. For years the board has refused to discuss ‘broken promises’ made to retirees and changes to the years of service requirements for actives; however, the discussion this month was about ‘how do we get back to what was promised’. I certainly see this as a step in the right direction. 

Robin Rayfield Executive Director, ORTA