Monday, March 15, 2021

Dean Dennis to Ohio legislators: Are you aware of what has been happening with STRS?

Ohio Legislators: Are you aware of what has been happening with STRS?

From Dean Dennis
March 15, 2021
Nearly a half-million retired, active and substitute teachers have paid into STRS Ohio. The vast majority of these contributors will need to depend upon STRS for their retirement since Ohio is a Non- Social Security State.
In September of 2012, the Ohio Legislature voted on legislation that deeply impacted Ohio's retired and active teachers. This legislation became law on January 7, 2013. As of July 1, 2013, active teachers have been required to work more years and contribute more of their salaries to STRS. Teachers retired prior to that date have not received a single COLA that was promised to them for the past 9 years. Retirees complain that, “even Social Security pays a COLA”. Research shows that in the average Non-Social Security State, the Employer's Contribution is 12% higher than that of the Employee Contribution towards their Pension Plan. But in Ohio this isn't the case; the Employer Contribution is exactly 0% higher. In essence, in Ohio, our teachers pay the most while our employers are allowed to pay the least. The maximum Employer's Contribution hasn't been raised in nearly 40 years.
The harsh legislation also turned over control of the teachers' COLA to the STRS Board. That was a mistake. The Ohio Legislature gave STRS the authority to "adjust" the COLA. The STRS Trustees completely eliminated it. STRS retirees have seen nearly 30,000 of their peers die without receiving their promised COLA. This wasn't lost on Representative Bill Seitz who, in a strongly worded letter to the STRS Board, expressed his "support of a growing coalition of STRS retirees to request relief from the harsh decision made by STRS to reduce to zero for at least 5 years the COLA adjustment for all existing and new retirees". Imagine if the OPERS Board had been granted the power to eliminate the COLA for their retirees.
As members of the Ohio Legislature, you need to step up. The Ohio Legislature needs to take back control of the COLA. There is no equity among Ohio's pension systems and no intergenerational equity within STRS Ohio. The trust level of STRS members is so low that recently they raised $75,000 within three short months for an outside forensic audit of STRS. The forensic audit is currently being conducted by Edward Siedle, a former SEC lawyer and Forbes Magazine contributor.
In Ohio, an outside fiduciary audit is supposed to be conducted every 10 years. STRS has gone over 14 years without such an audit. Meanwhile, retirees go without their promised COLA.
What will an outside forensic audit or outside fiduciary audit find? That remains to be determined. A recent news article has drawn attention to an STRS investment that went bankrupt ( ). The Panda International investment raises the question: has STRS Ohio lost hundreds of millions of dollars? Panda International is only 1 of over 130 Alternate Investments STRS Ohio is showing in their CAFRs report. It is interesting, because Panda filed for bankruptcy in 2017 but STRS is still holding them as an investment. (see the Open Letter to STRS Trustees on the STRS Ohio Watchdogs website for more detailed information)
Another article that raises concerns is a recent article regarding the Pennsylvania pension system. This article brought up the practice of hidden fees often referred to as "carry over interest" ( The Ohio Legislature needs to investigate and guarantee that this is not a practice of its five pension systems; in particular STRS.
Members of STRS are constantly told by STRS management how well the pension is run. Members are continually told that it is one of the top pension systems in the nation. If true, the STRS Ohio Watchdogs want to know why STRS cannot provide a simple COLA to their dedicated retirees while over 90 STRS investment staff members annually receive six-figure performance bonus incentives.
Ohio Legislators, are you aware of what has been happening with STRS?
Dean Dennis
March 15, 2021

Dean Dennis questions STRS Board: Is management hiding fees from you?

From Dean Dennis

March 15, 2021
Subject: Does STRS Have This Problem?
Another Open Letter to STRS Trustees: Is management hiding fees from you?
I last informed you about the STRS Panda International investment. I gave you a number of links and raised some concerns.
I now have another major concern after reading this article,
In short, in this article you'll read about fees that can be unreported. These fees are often called "carried interest."  As Trustees, I'm asking (1) that you ask STRS management if they are reporting these fees to you.  (2) How much annually are these fees costing us? (3) Do the Annual Investment Returns being reported to members and Board members include these "hidden" fees? From my research these fees are far from insignificant and may shed some light on our problems.
I remember the "transparency debate" surrounding Board Policies among the Trustees during the end of the February Board Meeting. Is it possible that the reason retirees aren't receiving their COLA while active teachers work longer but pay more for less, is because STRS management isn't transparent in reporting these fees? This happened in Pennsylvania. I hope you find out. I'm also going to put this question before the ORSC and the Ohio Legislature because as of July 1, 2021 none of pre-2013 STRS retirees, will have received their promise COLA for the last 9 years.
My best and thank you for the time you commit,
Dean Dennis

Pa. Treasurer Joe Torsella tried to reform the state’s biggest pension funds. Then he lost his job.

Torsella says his clash with the pensions was a rough schooling in a “corrupt system” that too often helps financiers and hedge funds, not the retirees, or taxpayers.

What happens when you, an honest citizen, try to reform a large public pension system? (Shades of Dennis Leone and STRS and OEA)? At least Dr. Leone didn't have a job to lose (he was a retired member of the STRS Board, 2005-2009), but he was greatly vilified by his peers on that Board when he provided proof upon proof of of misdeeds and mismanagement by the STRS Board at that time. What has changed since? You be the judge. 

From John Curry

March 14, 2021

[John Curry]: Let us compare with Pennsylvania public retirement systems....see any similarities? I see lots of them! Is what happened to Pennsylvania's teachers retirement system the same thing that has and is happening at Ohio STRS? Read on....

*     *    *
In sum, Torsella said, he found that the pension plans, especially the teachers’ fund, treated Wall Street as a close partner rather than as a hired servant and were enmeshed in “a culture that was staff-driven, where robust dissent was sometimes frowned on.
~    ~    ~    ~    ~
Pa. Treasurer Joe Torsella tried to reform the state’s biggest pension funds. Then he lost his job.
by Joseph N. DiStefano
Philadelphia Inquirer
Published Feb 19, 2021
In his 30 years of public service in places ranging from Philadelphia City Hall to the United Nations, Joe Torsella says he thought he had seen every kind of government dysfunction.
Then he went to Harrisburg to become state treasurer.
After four tumultuous years in office, Torsella looks back with a mixture of pride and exasperation. As treasurer, he took on the state’s mammoth, multibillion-dollar pension funds and tried to shake them down to their roots.
He made lots of headway — pushing to make secret money manager fees public, exposing poor performance, blocking political insiders from lobbying for contracts — but also lots of enemies. And after all his troubles, voters dumped him in November.
Now, Torsella says his clash with the pensions systems was a rough schooling in “how incredibly hard it is to change the ecosystem around certain parts of government, especially those that involve Wall Street.” The funds are the prize, he says, in a “corrupt system” that too often helps financiers and hedge funds, not the retirees, or taxpayers.
Larry KehresMount Union Collge
Division III
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