NOTE: To find the most current posts, please scroll down to the two big red arrows. You can't miss them.

STRS Ohio Watchdogs: a public Facebook group you can join

STRS OHIO WATCHDOGS

by Cindy Murphy

STRS Ohio Watchdogs monitor the management and investment practices of the State Teachers Retirement System of Ohio.

We advocate for prudent and transparent investments, the restoration of the COLA for retired teachers, and the rollback of additional years of service required for active teachers.

This site will provide you with information about the work that is being done by Ohio's active and retired teachers to preserve our retirement benefits. Check back often for updates.

Join our conversation on Facebook. You don't have to be a member of STRS Ohio to join. Everyone who is interested in learning more about the management and investment practices of STRS Ohio is welcome.

Use this link to join our pack on Facebook:.

https://www.facebook.com/groups/ohiostrswatchdogs 

Have you joined the Ohio STRS Member Only Forum on Facebook?

If you are a member of STRS Ohio and have a Facebook account, you are eligible to join thousands of others who make up the Ohio STRS Member Only Forum. This is a closed group of retirees and actives who are advocating for the return of our COLA, which, as you no doubt know, your STRS Board SUSPENDED on April 20, 2017. Two of our members, Bob Buerkle and Dean Dennis, filed a class action lawsuit against STRS on May 23, 2019 suing for the reinstatement of our COLA. The text of the lawsuit can be found on this blog. You can go here to join the Forum and sign the petition, already signed by more than 20,000 people, for the return of our COLA: Ohio STRS Member Only Forum

Click image to enlarge

Angel of Grief

Garrison Keillor

Items of interest in the Archives: The 2013 STRS Board Election

Many people have been very interested in reading about the irregularities of the 2013 STRS board election. There are many posts related to this topic, beginning the first week of April 2013, after the ballots were mailed to retirees from STRS. You can find them by going to the Archives for this blog, over in the right sidebar, and clicking on dates beginning with April 7, 2013. Dennis Leone announced his candidacy for a retired seat in November, 2012. There is a lot of information about him in the Archives, beginning with November 12, 2012 posts. If you want to read only the best stuff about that infamous election of 2013, go over to the sidebar on the right of where you are now, which is the archives of previous articles on this blog. Scroll down to April 2013. That's where the "interesting" articles begin. You will see many, clear up to the middle of May 2013.5/28/13

.....so what REALLY happened in 2003 that touched off a firestorm at STRS that is still smoldering today? Read it here, from the Cleveland Plain Dealer. (Hint: It ain't over yet!)

More here (Akron Beacon Journal, 2003)

A MUST READ: Dennis Leone Reform Initiatives as an STRS Board Member  Between 2005 and 2009

To find current, day-to-day posts -- pull your scroll bar down a ways, just below the big red arrows (you can't miss them). Thanks.

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Find your state representative and senator here.

http://www.legislature.state.oh.us/

I know, it's weird.........

Many posts that appear "at the top" for a while are eventually moved down, where they can be found under their original posting dates. Also, if you are confused by the postdating, this is done to keep these posts up there; otherwise, they drift down when new posts are added. It's a "blog thing" which I have no other way to control. KB

Handy links: Contacts, information and more (short version)
This is an abbreviated version of the original 'Handy links' post. Click here to view a more complete list. (Some of it is old.)

STRS Board.....STRS website

Board calendar

E-mail contacts at STRS (old, but some may still work)

Map/directions to STRS, 275 E. Broad St. Columbus, OH 43215

STRS "Membership Survey" (spoof)
State legislators.......State of Ohio website

Latest OEA salaries (2011) over 100K; USDL report

Rich DeColibus' PowerPoint presentation STRS' PBI Program; Does it work?: click December 21, 2008 (blog Archive) and scroll down to December 23 posts.

Charts: PBI (bonus) payments

Popular links; click, then scroll down: charts, graphs, investment staff, lists, spreadsheets

$TR$ Inve$tment $taff $$$ (old)

SPECIAL (must read):

Dennis Leone's INVESTIGATIVE REPORT on STRS: May 16, 2003...Who is Dennis Leone?........(PDF version)...More on Dennis Leone .......(PDF version)

Dennis Leone: "Catcher of Thieves"

Dennis Leone's STRS Report to ORTA, March 2007

Dennis Leone's Testimony at the Statehouse 9/5/12
The Plain Dealer article that started it all

Dennis Leone: Factors Driving STRS 30-Year Planning and Revenue Assumptions (with charts)

Historic PBI vote, January 16, 2009

Charts: PBI (bonus) payments

CURRENT POSTS BELOW

Rudy Fichtenbaum: More on STRS v. Passive (Index) Investing

 STRS v. Passive (Index) Investing

By

Rudy Fichtenbaum

            This is the last part of a three-part series. In part 1, “Why it is So Hard to Beat an Index”, I reviewed the literature on index or passive investing v. active investing. In part 2, “Does Active Investing Beat Passive Investing”, I presented evidence that clearly showed that passive or index investing outperforms active investing. This is part three, and it will deal explicitly with STRS’s performance.

            To start, I want to make it clear that a pension needs to have diversified investments. It cannot just invest in the S & P 500. A diversified approach to passive investing would invest in broadly in U.S. equities, international equities, and bonds. Second, the reason it has taken me so long to present the third and concluding part of this series, is that I have struggled with a way to try and present this information in a way that would be both valid and understandable.

What I have come up with is two different methods of comparing STRS’s performance with passive investing strategies.

            Method One is to compare STRS’s performance to a portfolio of three Vanguard Index Funds, namely 56% VFINX (S & P 500), 34% VBMFX (Total Bond Market Index Fund), and 10% VGTSX (Total International Stock Index Fund). I used Vanguard funds because they make quarterly returns for their funds publicly available; that allows for the calculation of fiscal year returns that match STRS’s fiscal years. I started my analysis with 1989, because that was the earliest time when I could find reported returns in STRS’s Annual Comprehensive Financial Reports (ACFR), formerly known as Comprehensive Annual Financial Reports. In other words, I did not cherry pick my data.

            For the very early reports from STRS, it is not always clear whether the total returns reported were gross or net. But for purposes of my analysis, I am assuming they are net. If in fact some of the early STRS returns were gross, that would just strengthen my findings. I chose the 56/34/10 mix specified above because over the 28 years (1989-2025) STRS returns had a standard deviation of 9.64%, and the 56/10/34 mix had a standard deviation of 9.65%. The standard deviation is a measure of volatility and indicates the amount of risk that is being taken. In comparing returns, it is important to compare returns relative to the level of risk that is associated with each return, because according to modern portfolio theory, greater risk should lead to greater returns. 

            To repeat what I said above, I constructed my portfolio using three Vanguard index funds. For stocks, I used VFINX (the Vanguard S&P 500 Index Fund for Investors); for bonds, I used VBMFX (the Vanguard Total Bond Market Index for Investors); and for international equities, I used VGTSX (Vanguard International Stock Index Fund for Investors). Investor funds generally have higher expenses than institutional funds, but I used investor funds because the data available for investor funds go back further in time. For example, Vanguard does have a fund for institutional investors (VFFSX) with lower expenses, but annual return data was only available starting in 2017.

Using Portfolio Visualizer Backtest Portfolio Asset Allocation, I calculated the difference in the average annual rate of return VFFSX and VFINX from 2017 to 2024: VFFSX outperformed VFINX by 0.15%, the difference due of course to greater expenses for VFINX. I also looked on Vanguard’s website and found a note stating that the fund’s annualized six-month expense ratios for that period are 0.14% for Investor Shares and 0.01% for Institutional Select Shares. That would suggest the difference was 0.13%. So, I split the difference and adjusted the returns of VFINX by adding 0.14% to them to reflect the fact that STRS, as an institutional investor, would have access to lower cost funds. The expenses for VBMFX were listed as 0.15% and 0.01% for VBMPX; the difference in returns using Portfolio Visualizer Backtest Portfolio Asset Allocation in returns from 2010 to 2024 was 0.14%. In both cases, then, the difference was 0.14%; so, I added 0.14% to the annual returns of VBMFX, again to reflect the lower cost available to STRS. In the case of VGTSX, the investor shares have an expense ratio of 0.17% and institutional plus shares have an expense ratio of 0.05%, so I adjusted the investor returns by 0.12% to reflect the fact that if a pension were purchasing this index fund it would be at a lower cost than an ordinary individual investor.

One last point about the data: I used the S & P 500 Index because Vanguard’s Total U.S. Stock Market Fund, which is probably the equivalent of the Russell 3000, the index STRS uses to benchmark its U.S. stock performance, does not go back to 1989. However, the correlation between the S & P 500 and the Russell 3000 is 0.98.

Over that period, 1989 to 2025, STRS had an average annual return of 8.52%, and my diversified Vanguard portfolio had a return of 9.01%. In a more technical version of this paper, taking into account the interaction between STRS returns and its cash flows, I estimate that STRS would have had an additional $31 billion. That would have given STRS a 95% funding ratio. Of course, $31 billion is just an estimate. But even if it is too big by a factor of two, the lesson remains: STRS would have had many billions more had it pursued index investing. 

Method Two for comparing STRS’s performance with passive investing strategies is to use “return based style analysis” (RBSA), a method developed by Nobel Prize winning economist William F. Sharpe. This is the method that Richard Ennis employed when, in his analysis of STRS returns in 2023, he looked at STRS’s performance. Using RBSA, I have updated his results so that after the update, they apply to the period from 2009 to 2026.

RBSA uses quadratic programing to pick a mix of indices that minimizes the variance between STRS’s actual performance and performance from three indices, the Russell 3000, Bloomberg Barclays U.S. Aggregate (U.S. Bond market), and MSCI ACWI ex-U.S. (Hedged). The latter is a world stock market index that excludes the U.S. The hedged version, chosen by the model, is a version that removes gains and losses from changes in currency valuations. (STRS hedges 50% of its international investments). The model constructed a portfolio that was 58% Russell 3000, 28% Bloomberg Agg, and 14% and MSCI ACWI ex-U.S. (Hedged). 

From 2009 to 2026, STRS’s annualized return was 8.02%, whereas the return from the portfolio constructed by the model from the Russell 3000, Bloomberg Agg, and MSCI-ACWI over the same period was 9.18%.

This result is similar to that obtained when I used the Vanguard Funds. Further, the correlation between RBSA (Method Two) and STRS’s actual performance was 96%. In addition, the STRS portfolio had a standard deviation of 0.11 and the index portfolio had a standard deviation of 0.11. So, the index portfolio took the same risk that STRS took with its active management.

The conclusion that I draw from these results is that our members would have been better off if STRS had used passive investments rather than pursuing a strategy of active investing.

August 31, 2026

Dan MacDonald's report on the August 2026 STRS board meeting

From Dan MacDonald

August 23, 2026

FISCAL YEAR ENDS 

August’s STRS Board meeting was a Monday and Tuesday, August 17/18, 2026. It opened with the Investment Committee. June closed the 2026 Fiscal Year [FY]. The net return for June was a positive 0.2%. The total net fund return for the FY was a positive 14.2%. Total investment assets ended June about $110.2 billion, higher by $9.5 billion in FY 2026. Total fund benchmark return was a positive 14.6%. Total fund net return annualized for the past five years was a positive 7.6%. [Note that there is still a $4 billion cash flow concern with actives and employees’ contributions into STRS and benefit payments out from STRS.] A slide pointed out that the Investment Department ‘s aggregate investment net value added over 5 years was $868,138,381 while the aggregate Performance Based Incentive [PBI] was $40,448,435. Ratio to PBI : 21 x. Outside consultants Callan and Meketa then basically praised the department on their excellent quarterly returns with comments like we are “living currently in a streak we may never see again,” ‘Super, super year.” Multiple charts were presented for quarter, year, 3 years, 5 years, and 10 years. The meeting concluded with a review of security compliance policies and procedures.  

The Governance Committee then met. Much time was spent determining the definition of risk for the policy booklet. Consensus was reached on a definition. Following, Executive Director Toole presented language around Board members request to staff and vendors/consultants. He presented language changes as governance, transparency, and cost concerns. Much discussion amongst all Board members and both the AG lawyer and the Board’s lawyer. It became clear that Board members can have discussions with the consultants about clarification, options, suggestions, etc. The conclusion, Board member request process will remain the same. The committee concluded with brainstorming topics for the October Board’s Education and Planning session.

Tuesday began with the Audit Committee meeting. The internal audit team was introduced and closed and open audits were reviewed. Outside consultant ACA then presented its GIPS review of STRS. STRS has been verified by GIPS and in compliance since 2006. GIPS is the “gold” standard in accountancy. Outside consultant Crowe, outside auditors, presented their current audit of STRS which will conclude in December. Crowe was chosen by the Ohio Auditor of State and is in its 1st year of a second 5-year audit contract. A brief executive session concluded the session. 

The actual Board meeting followed. Public Participation had 8 speakers, all retirees. Dean Dennis presented ORC 3307.07 giving copies to the Board members. Dennis asked why a full COLA was not being paid since money was available. Board member Allison responded, VERY UNUSUAL, thanking Dennis for his comments and commitment and reminding Dennis that pending litigation at the STRS meeting is not the correct forum. Lunch followed.

After lunch, the Health Care Committee voted for an ad hoc sub–Health Care Committee over future health care providers and staff doing a study of alternatives to STRS present approach, even mentioning PERS’ HRA program as an example. [I think the Board wants to stay balanced and aware with staff ideas.]  Christina Elliott presented Members’ Benefits Update sighting accomplishments, member experience surveys, health care insights, forces shaping future member benefits and strategic priorities.

The Executive Director's Report was different. It was his 1st anniversary with STRS. He addressed the Heritage Foundation study with his concerns about the state legislature and the STRS Board composition. He warned of Defined Benefit attacks and that actives, retirees, and STRS staff are all in, together. He emphasized strsoh.org website, trust, and verification of facts. He also commented on a national conference he attended with Board member Chad Smith. 

Routine Matters followed. Harkness was voted 2027 Board chair. Davidson was voted 2027 Board Vice-Chair. Bills were paid, and committee reports were given. Under Old/New Business Jones had an expense covered, and Smith gave his report on the national conference.

The next Board meeting will be October 21 and 22; no meeting in September.

Dan MacDonald to STRS board: "As always, put actives and retirees first. Restore actives and retirees and stop putting staff enhancements a priority."

Dan MacDonald's speech to STRS board

August 18, 2026

FROSTED GLASS

Mr. Chair and members of the Board, good afternoon. I am Dan MacDonald, an STRS retiree with 38 plus years of service and Executive Director of Local 279R, Northeast Ohio AFT retirees, regularly attending Board meetings since 2014.

Frosted glass is a translucent material created by scattering light through sandblasting, acid, etching, or applying a specialized film. It blurs visibility to provide privacy while still allowing natural light to pass through making it popular for windows, shower doors, and office partitions.

Recently, the Heritage Foundation produced Retirement at Risk: The Political Economy of Public Pension Governance. Their reporters reviewed STRS from 2003 to 2022. The article stated that STRS’s financial numbers fell short of the audited numbers 19 out of the last 20 years.

STRS replied. A report was recently published with misinformation about our investment reporting. Here’s the verified truth: [Whatever the hell Verification means]

The report confuses the total fund and valuation returns. These measurements answer different questions and are calculated in completely different ways. [True]

The authors cite an “audited return” based on their own calculations. That number is not audited and appears in no STRS Ohio audit. [True]

The claim of a multi-billion-dollar discrepancy in reporting is incorrect and is based on the authors’ flawed analysis and unaudited calculations. [Probably True]

STRS Ohio takes the extra step of independent GIPS® verification because accurately calculating investment performance is critical to the State Teachers Retirement Board’s oversight responsibilities.

The STRS reply is all frosted glass. GIPS is not an auditor; they verify. They verify the numbers given. This is stated yearly. Many years ago, the PBI payment date was moved closer to the end of the fiscal year before a finalized accounting of the just closed fiscal year.  Totally close the fiscal year’s book, THEN determine PBI, pay later, not earlier, change the PBI policy. Cancel GIPS, save some money. [Not sure of canceling GIPS anymore because of CPA Ms. Falls comments.]

As always, put actives and retirees first. Restore actives and retirees and stop putting staff enhancements a priority. 

Bob Buerkle to STRS board August 18, 2026: How many of our retirees must die before the Ohio Attorney General and the Legislature will let the STRS Board perform their Fiduciary duties to deliver the annual COLAS that our retirees were promised at retirement and codified in ORC 3307.67? Is the number 70,000, 80,000 or maybe it is all current retirees?

 

Suzanne Laird to STRS board: A challenge to STRS employees to put their raises and their bonuses to compassionate use

Suzanne Laird's speech to STRS board

August 18, 2026

Good Afternoon, Members of MY Board:

Well, we saw quite a show last week at the ORSC meeting. I will reserve my comments regarding the Heritage Foundation journal article for another time, once the Math starts “Mathing.”

You may start your timer now.

Let’s set aside the manufactured outrage on that, and instead, focus on the comparison brief of the five pension systems in the state of Ohio: the one which stated that STRS retirees have the lowest purchasing power, without a dependable COLA, and that our purchasing power has degraded more than all others. Where was the outrage when it was revealed that our assumed future COLA rate is zero?!

As my 10 year old sign says: Do the Math: no 3% COLAs….. no bonuses. No matter how many times we drag ourselves and our tattered signs down here, we know you will still award the ridiculous raises and bonuses.

At the March meeting, one of the highest paid STRS employees approached me and said he’d done some investigating. Had I taught in the school district from which he graduated? We determined yes, while I had not taught him, I taught some of his siblings. I’d like to remind this employee, as well as all the overly-well compensated employees here, what our Worthington City Schools treasurer did, once.

This school treasurer won an award for having prudently managed the taxpayer’s money. The award came with a monetary bonus. Instead of pocketing that bonus, he anonymously donated it to the lowest-paid employee of the district.

Now, if you have attended any of the town hall meetings, you’ve heard that STRS is still paying benefits to some teachers over the age of one hundred years. No mention is ever made of their final average salary.

I challenge any of you in this building to donate this year’s raise to a one hundred (or more) year old retiree. How about one tenth of your bonus? Or how about your entire TWO hundred fifty thousand dollar bonus?

Who is really worthy of that amount? You, or a hundred year old teacher you purportedly work for?

Cathy Steinhauser to STRS board: "Shared sacrifice in this scenario should be applied…that’s called being ethical and it’s also legal. STRS reminds me of this line, “Money for me but not for thee.”…absolutely disgraceful!"

Cathy Steinhauser’s Public Participation speech August 18, 2026

Cathy Steinhauser – 35 yrs. satellite teacher of Family & Consumer Sciences through Pickaway/Ross CTC for Circleville City Schools.

Sorry to have disappointed you the last 3 board mtgs. (insert sarcasm here) by not attending, but when crisis occurs in families, you pay attention to what matters in life at that moment.  But I’m back and lucky for you I’m ready to dive head first into the ridiculous and absurd antics of STRS.

I listened to yesterday’s Zoom mtg., as well as the past 3 mtgs. I missed, and was amazed once again at the amount of self-serving entitlement within this pension.  This institution seems to feel that hired workers here deserve more than the teachers who through their blood, sweat and tears worked for 30-35+ yrs. in a classroom and are the entity that actually pay your salaries. You feel more deserving of up to 6 figure bonuses in past yrs. while teachers have had to wait for crumbs to be dropped by way of a COLA a handful of times in 13 yrs. It reminds me of Oliver Twist in “Oliver!” when he asks “Please Sir, I want some more.”

Teachers shouldn’t have to beg their own pension to restore a given right. We’ve had to tighten our belts to the point that there are no more holes left in our belts to notch while your belt seems to loosen more as the years go by.  Shared sacrifice in this scenario should be applied…that’s called being ethical and it’s also legal. STRS reminds me of this line, “Money for me but not for thee.”…absolutely disgraceful! 

You talked about board members who ask for information which may or may not need an outside person for clarity… i.e. pay someone to find that information one way or another.  Yet you have a budget that keeps increasing every year by millions!

Even the ORSC recommended you rein in your spending! You borderline-belittled a member of this board who wants to save time and asks for a listing of staff members and their specialty areas so that they can contact them directly instead of emailing several then waiting to see what information is offered.

Many pensioners are tired of how you throw around the word FIDUCIARY in a manner that neither begins to abide by what it actually means. I have spent countless speeches the past 5 years explaining what this word means and you still insist that it applies to the staff at STRS first. Nothing says frustration like saying the same things over and over again and you’re ignored.

Let’s try this again since it’s been a while:

FIDUCIARY: “A person who acts on behalf of another person or persons, putting their client’s interests ahead of their own, with a duty to preserve good faith and trust. Being a fiduciary requires being bound both LEGALLY AND ETHICALLY to act in others' best interests”.

NO 2% or 3% COLA, NO BONUSES!

Robin Beebe to STRS board: "According to the current Executive Director, "Our books are open. When you're running a state pension plan, your books are always open. We have nothing to hide." Well, two sets of books, per the Mendenhall report, seem to refute that. It is unethical at best, and at worst? You be the judge. "Something is rotten in Denmark...."

Robin Beebe's comments to STRS board

August 18, 2026

My name is Robin Beebe. Retired Master's Degree Teacher of mainly 4th Graders, 2nd Graders, Kindergarteners, a smattering of other elementary grades and eight summers of Migrant Education. 35 years. Fremont City Schools and Perrysburg Schools. Retired 17 years. Denied my full 3% COLA's. Denied approximately $136,000+ and counting.

     Well, it's August - PBI/Bonus Month. I would be remiss not to mention the Mendenhall & Sutter "Retirement At Risk" report. Basically, STRS has had two sets of books, one of which overstated the investment returns by $9 Billion over 2 decades resulting in the inflated Bonus/PBI SCHEME. You can try to put all the spin on this report you want. But this report is out there. It will not go away. The PBI's should be halted until this all gets rectified. A GIPS  verification based on "STRS SUPPLIED DATA" is not an audit. It is not an audit by a CPA. And there is no Fiduciary Duty to pay bonuses to Investment Staff.

     According to the current Executive Director, "Our books are open. When you're running a state pension plan, your books are always open. We have nothing to hide." Well, two sets of books, per the Mendenhall report, seem to refute that. It is unethical at best, and at worst? You be the judge. "Something is rotten in Denmark...."
     So...you've all heard the expression, "It's Not Nice to Fool Mother Nature". (Put on flower crown.) Well, it's not nice to FOOL active and retired Ohio teachers!!!
     So, here is an idea. And, no fooling, I am not an Investment Blue Suit. But here is one possible way forward. I get a publication called Bottom Line Personal which is a $39/year subscription. From the July 2026 issue, I want to share just a few Exchange Traded Fund suggestions. These are diversified and have minimal fees and a very lucrative and profitable track record. #1: Tech Stock ETF - Invesco QQQM with a 0.15% expense ratio and a five year performance of 17.82%.  #2: S&P 500 ETF SPDR Portfolio (SPYM) passively tracks performance of 500 of the largest US companies with an annual expense ratio of 0.02% and performance of 15.76%.  #3: US Large Cap ETF called Fundstrat Granny Shots (GRNY) with a 0.75% expense ratio and one year performance of 31.3%. With ETF's you won't need an Investment Staff of 110+. You won't need to award millions and millions of PBI dollars. 
     So, I repeat, "It isn't nice to Fool active and retired teachers. I wish there was a way forward for honest and good things to happen. Hmmm... if I only had a magic wand to make wishes come true.... (Wave and sound wand.)