Dan MacDonald's report on the December 11, 2025 board meeting

From Dan MacDonald

December 14, 2025

DECEMBER 2025 STRS BOARD MEETING

I attended the December (12/11/2025) Board meeting. On Wednesday, the Board was active in three committee meetings: the Governance Committee, the Investment Committee, and the Audit Committee. The Governance Committee focused on a December 2025 thru August 2026 month by month, week by week, planner with 10 areas: skills matrix, information requests, new committee structure, committee schedules and workplans, communication strategy, policy framework, trustee orientation, performance management, succession planning, & risk management. The slide was daunting, and the committee was pushed by outside consultant Global Governance Advisors for input. It was a tedious committee meeting.

The Investment Committee meeting followed. Net total return for October 2025 was a positive 1.2% bringing the net fund return for FY 2026 to 6.1%. Total investment assets ended October at approximately $105.0 billion. November preliminary total net return was a positive 0.5%, bringing the total net return for FY 2026 to a positive 6.7%, total net assets to approximately $105.3 billion, up $4.7 billion since July 1, 2025. [This is all good news.] Outside consultant CEM then compared STRS to 269 funds reporting that STRS was consistently in the upper quarter and our internal investment staff saved $145 million compared to peers' medium, medium external costs using a set from the two hundred sixty-nine that were comparable to our fund investment portfolio. Outside consultant Albourne presented STRS fee validation. [In other words, Albourne checked all fees paid as contracts specified.] Outside consultant Meketa and outside consultant Callan both followed with quarterly performance reports. Both consultants showed STRS investments in the upper quartile to peers. The meeting closed with the semiannual broker evaluation and associated policies. [Not much to comment on here except that STRS has many outside consultants reviewing its investment department and all of them highly praise our staff. Real Estate has not recovered from 2020 COVID, but it is difficult to sell properties. Real Estate is truly a long-term investment which pre-Covid, more successful. STRS performance in domestic equities has also lagged in the last three years. Staff acknowledged.]

The last committee to meet was the Audit Committee. STRS has internal independent auditors within its staff. The chief auditor discussed 2025 audits and 2026 scheduled audits.

Thursday Board meeting started promptly at 8:30 am with the approval of minutes. Outside consultant Crowe verified STRS’s 2025 financial closing statements with an unmodified opinion. [In other words, the closing statement numbers and calculation from June 30, 2025, were all verified.] The Member Benefit Department then presented a Sustainable Benefits Plan decision matrix. Heavy discussion of COLA and Years of Service were thoroughly dissected. [Outside consultant Cheiron’s de minimis presentation at the April 2026 Board meeting should be a “must attend.”  Board members are still divided over restoring benefits, which some call enhancements, length of time to be 100% plus funded, fear of the state legislators, the whole concept of de minimis.] Outside consultant CEM presented its study on the benefits department services to its members, active and retired.  STRS did well in cost and services compared to peers. Better services with comparable costs. The Benefits Department presentation concluded with discussion on the Disability Program, focusing on the termination of disability benefits, the definition of teaching service, the independent medical exams, and clarity on the board’s action related to approvals, denials, and terminations. [Very tough decisions are made by the Disability Review Panel with Ohio Revised Code, STRS staff and physicians' findings in conflict to elected Board members knowledge of teaching.]

Following lunch, Science Teacher Chris Monsour from Tiffin City Schools was recognized as Ohio’s 2025 Teacher of the Year. Next was Public Participation. Nine persons spoke, 8 retirees and one former STRS staff member. Global Governance Advisors returned to focus on strategic planning. Charts were shared regarding Board hours met for STRS, CalsTrs (CA), and TRS (Texas). Effective Committees and Best Practices slides were shared. The scheduled hour turned into 12 minutes. The discussion bogged swiftly, and Executive Director Toole intervened. [It was a timely intervention.] The Board’s lawyer then did some legal training to fulfill ORC requirements of 171.50 and 3307.051. Topics included Compliance, the Open Meetings Act, and the Public Records Law. [Fact. There were 505 Public Records requests in 2024.]

The Executive Director’s Report covered pension system updates and general updates plus the honoring of Greg Nickel, who is retiring from the benefits department of STRS. [Read my Public Participation, huge loss.] The meeting ended with Routine Matters and no Old/New Business. Crafty Chair Fichtenbaum addressed his allowance of Greg Nickel’s name during Public Participation by 4 presenters. Participants are not to use names if you closely listen to the reading of Board policy before Public Participation.

The next Board meeting is scheduled for February 17 & 18, 2026, a Tuesday and Wednesday. There is no January meeting.