Dean Dennis seeks to enlighten our Acting Executive Director of STRS

WHAT ARE WE DOING WRONG? Asked STRS’s Acting Executive Director at the September 2024 Board Meeting

Happy to answer.

By Dean Dennis

Acting STRS ED Lynn Hoover and the Chief Financial Officer appeared frustrated during Friday's September Board meeting. This occurred after resuming the meeting after going into Executive Session. What happened?

Prior to going into the Executive Session, there was public participation, where many speakers used their time to honor outgoing board member Wade Steen for his loyal and steady support of members. After the public participation, Wade Steen gave a heartfelt speech thanking members for their support and shared why it was an honor to serve teachers.
After Wade Steen’s speech, Board member Julie Sellers made a motion of no-confidence directed at the senior management team. Clearly, senior management was the driving factor behind the “no-confidence” motion. There can be many reasons for the motion, but here is one. In May of 2024, after reform-minded Board member Michelle Flanigan won her election, within days, the press reported that STRS hand-delivered an “anonymous 14-page letter” to the Governor’s office. This led to the Governor turning the letter over to Attorney General Yost. Within days, the AG filed a suit against Board members Wade Steen and Dr. Rudy Fichtenbaum. The AG filed the charges regarding the anonymous and unfounded accusations without contacting them. To date, no allegations have been found.

Following Board Member Sellers’ motion, the Board discussed whether the motion should be directed toward senior management or targeting the anonymous letter's authors. Board members seemed divided. The “no-confidence motion” failed due to a tied vote. The vote was tied because first-time Board Member Michael Harkness abstained. Regardless of the tie vote, a clear message was sent to STRS management. How can a Board work with a staff that is going behind their backs?

The above brings us back to the Friday, 2024, September Board meeting readjourning after attending Executive Session. Acting ED Lynn Hoover is supposed to give her Executive Director report; she is clearly upset. She begins her report publicly, expressing that she is unsure what to report after the “no-confidence” vote. She then goes on to share that she and her staff work hard and that without clarity of what they are doing wrong, it is hard to find a direction to move forward. Lynn Hoover also acknowledged she was going to be retiring soon and was hoping to accomplish getting STRS on track.

Out of fairness to Lynn Hoover, most Board Members acknowledge that she is more approachable than her predecessor and works tirelessly. There isn’t any doubt that she values and promotes her staff. These qualities made it hard for some Board Members to vote “no confidence.” The problem is this: Lynn Hoover and her predecessor constantly worries about taking care of their staff and the morale of their staff. Hello, what about the morale of the 320,000 members who are hurting? Retirees and their families losing over $100,000 in their golden years doesn’t exactly boost morale, nor does having to work longer for less if you’re an active teacher. Senior staff has always come across as tone-deaf. Everyone knows this but them.

So, in response to Acting Director Hoover’s question, what are we doing wrong? Here are some answers:

Members raised over $75,000 of their own money for a forensic audit, in part because the Ohio Retirement Study Council failed to audit our pension in a timely manner. After the audit, Benchmark Services filed a suit claiming that the audit couldn’t be completed because STRS withheld certain requested documents. The court has ruled on this matter, yet management still withholds the documents. Members think you are hiding information that is important to fixing our pension. Turn over the documents.

Don’t fight Board Members' efforts to move towards indexed investments. Private Equity investments have non-disclosure agreements and fees that aren’t transparent. Far too much of our members' pension monies are in these high-risk and opaque investments. Saving the fees we spend on these investments alone would be a significant start in improving our finances. These investments also obscure our actual investment performance because the general partners provide the fair value of these investments rather than our auditors. Members feel that you are stubbornly remaining in these investments to protect staff jobs and fighting the move toward passive investing. Stop resisting.

Move real estate investments into Real Estate Investment Trusts (REITs). These securities trade like stocks on the major exchanges. Most have income-producing real estate or related assets. REITs are publicly traded and liquid investments, whereas our real estate investments are not. REITs have a stated fair value, whereas we assign the value to our current real estate portfolio. Shift our real estate investments into REITs and cut our staffing costs.

Make the STRS property more efficient. Here are some easy items. Tear down the glass between the members and the staff where STRS meetings are held. A glass wall certainly doesn’t feel like we are working together to fix our pension. Open the gym in the building to all STRS members, or is it only the staff’s gym?

Listen to what your members tell you during public participation and on social media. Members are not your enemy; they are your employers. For over a decade, the lack of proper employer contribution has been a problem, and it has been repeatedly brought to your attention. STRS lobbyists have failed members because they do not have the appropriate relationships to move this problem forward. Many members feel your relationships with legislators are more geared towards protecting staff than the benefits its members earn.

You asked what you were doing wrong. I hope this helps.