Thursday, April 29, 2021

Bob Buerkle: Dump Stein and Walters

From Bob Buerkle

April 29, 2021
In their own words, as stated in the Board Election materials, both Bob Stein and Rita Walters want credit for the current strength of the STRS Health Care System.
In 2020 the STRS outside Actuary, Cheiron, told the Board they "Did all the right things" and with very limited resources to rescue the HC plan. So how did this happen, going from predicted failure to a plan good for at least 60-years? Here's how, and the answer should result in both of them losing their elected Board Seats!
When STRS changed the retirement rules to a minimum of 35 years and age 60, this change assured STRS that instead of needing to provide 12-14 years of healthcare they would only need to provide 5 years before Medicare would kick-in and pay for most, if not all of their healthcare needs. By making teachers work 5-9 years longer due to the age 60 requirement, STRS was able to transfer the health-care costs onto the backs of the employers for those 5-9 years.
Do you think Stein and Walters should be rewarded for what they have done to our pension plan? I don't either.
Many teachers have complained that they have not had raises for years. Now you know one of the reasons why!
Vote for Rudy Fichtenbaum, Elizabeth Jones for STRS Retiree Board Seats.

Wednesday, April 28, 2021

John Curry explains how Medicare Advantage plans work (for the retirement system)

From John Curry April 28, 2021 From Facebook

How do Medicare Advantage plans make money (for the retirement system that offers them)?

Medicare Advantage is funded from two main sources. The plans receive some funding through monthly plan premiums, but most of the money comes from Medicare. The private insurance companies that offer the plans receive a payment each month from Medicare.

P.S. I should add...the more claims they deny the more money they make! Sound familiar?


Ohio Retired Teachers Association to file lawsuit seeking records for ongoing forensic investigation of Ohio State Teachers Retirement System

From ORTA Newsletter
April 28, 2021
Through a grassroots donation campaign that began on October 28, 2020, The Ohio Retired Teachers Association (ORTA) engaged Edward Siedle of Benchmark Financial Services to conduct a forensic audit of the $80 billion Ohio State Teachers Retirement System. Mr. Siedle, who is a former SEC attorney and internationally recognized pension expert, has performed over $1 trillion in forensic reviews of public pensions across the United States and regularly uncovers mismanagement and fraud. He has received record-breaking whistleblower awards from federal regulators for assisting government in prosecuting Wall Street wrongdoing. Public pension systems across the U.S. are notorious for paying high fees for risky investments and getting poor performance.
On February 19, 2021, the law office of Marc Dann, Ohio’s former attorney general, submitted a public records request on behalf of Mr. Siedle to STRS requesting records related to the pension’s investment managers, investment consultants, performance compliance auditor, investment cost monitor, financial auditor, custodians, as well as board and staff.
While STRS Ohio has provided hundreds of pages of documents the pension has refused to provide certain key documents about STRS investments in Private Equity and Hedge Funds. Those Documents are critical to Mr. Siedle’s ability to understand the value and appropriateness of such high-risk investments. The records withheld, many of which were withheld at the request of the investment managers themselves are clearly public records and Ohio law requires that such records be provided to the public upon request. After months of denials of requested information and slow walking the responses, the decision has been made to file a lawsuit to compel transparency.
The lack of cooperation by STRS is even more surprising given that the pension is well-aware that ORTA’s forensic review was commissioned, as well as paid for by participants, with the stated objective of improving management and oversight of the pension. Pension fiduciaries legally required to discharge their duties with respect to the funds solely in the interest of the participants and beneficiaries should welcome an independent review by a nationally recognized expert. Further, given the longstanding, profound fiduciary breaches and disclosure failures that have already been identified at the pension, it is clear STRS can benefit from an independent review by an expert not of its own choosing.
Transparency has ceased to be a priority at STRS but remains of great importance to taxpayers in Ohio as the pension collects money paid by taxpayers through its public pension system. “Knowing how much STRS has invested in each asset and how much those assets are worth is critical to understanding the health of our public pensions,” says Robin Rayfield, ORTA’s Executive Director.
For more information please contact:
Dr. Robin Rayfield Executive Director Ohio Retired Teachers Association 614-431-7002
Edward Siedle Benchmark Financial Services 561-703-5958

Robin Rayfield's report on the March, 2021 STRS Board meeting (and more)

From ORTA Newslietter
April 28, 2021
The STRS Board met in March for their monthly meeting. There was some good news from the investment staff as the market continues to add value. If things continue to trend in a positive way STRS is poised to earn over 20% for the year. So far, STRS has added $12 billion to our portfolio! The controversial topic of ‘performance incentives’ was discussed, and policy changes were discussed in some detail. When we learned that STRS performance people were not really measured against any benchmark, many retirees and some STRS Trustees expressed great concern. The proposed policy would require that all investment personnel be measured against some fixed benchmark to be eligible for any bonus. The new policy, if adopted would begin next fiscal year  (July 2021). It would not be fully implemented for a few years, as STRS measures its performance over a longer period. The proposed budget for next year was presented. Highlights include a line item for salary increases based by department and merit. STRS offered justification for salary increases by reminding everyone that STRS employees do not receive ‘step increases’ like ‘teachers do’. Trustee Wade Steen reminded everyone that not all teachers receive a salary step increase and that often steps in the salary schedule are frozen and many teachers are not eligible for a step increase every year. I mention this because I find it interesting that NONE of the former teachers or active teachers on the board of trustees spoke up about step increases for teachers and that not all teachers receive an automatic salary increase each year. Why would a non-educator be the one to remind people attending the meeting of this fact?
Gary Russell (Deputy Executive Director at STRS) provided an update on health care. An increase in the drug deductible was discussed, but no action was taken. The health care fund is in excellent shape at 188% funding. Premiums will be established for the following year at the June meeting.
Something interesting to note is that there was no discussion of the Panda Power loss that was recently revealed. STRS reported last month that the alternative investment people had ‘lost’ over half a billion dollars in an investment into Panda Power. This revelation came after a question to STRS about this investment. STRS responded that the loss of $525,000,000 was not significant and that the alternative investment program was performing quite well. For more information on this matter you should read John Damschroder’s article here. It appears that the loss reported on Panda Power might just be the tip of the iceberg.
STRS Elections
As most retirees know, the election for seats on the STRS board is underway. If you have not received your ballot, there is still time. Call 866-720-4357 to cast your vote.
Forensic Audit
ORTA has copies of Ted Siedle’s book Who Stole My Pension. We will gladly send any ORTA member a copy, free of charge. All we ask is that you pay the shipping cost. We can mail you a copy for the price of postage ($5.00). Call our office and we will send you a copy! 614-431-7002.
ORTA has been in received periodic updates from Mr. Siedle since he began the forensic audit during the first week of February. He has requested a great deal of information from STRS. Unfortunately, STRS has not provided the necessary information in a timely fashion. Specifically, STRS has not shared the information related to STRS’s investments in alternative investments. Mr. Siedle is attempting to determine how the alternative investments are performing. ORTA would like to know how much STRS has invested in each of the 135 hedge funds that we have invested in and how much those investments are worth. One reason this is so important to know is related to the information on Panda Power noted above. STRS ‘lost’ over ½ billion dollars in the Panda Power investment 4 years ago that was just discovered last month. STRS is also invested in Infinity Q, another hedge fund that just announced it was being liquidated. With over $15 billion invested in hedge funds and other risky investments STRS needs to share the status of these investments with the people whose retirement is at risk. STRS claims that they do not have to share this information. Mr. Siedle and his legal team disagree; Ohio law requires the pension fund to disclose investment information. Mr. Siedle is preparing a legal action to compel STRS to provide this information. I’m told this legal action will not cost ORTA any additional money.

Tuesday, April 27, 2021

An STRS Panda Presentation Flashback - March 2021

From John Curry

April 27, 2021
STRS Ohio Earns Auditor of State’s Top Rating for Transparency in 2021!
The following paragraph was written in the April 16, 2021 STRS newsletter:
"In conjunction with Sunshine Week, Ohio Auditor Keith Faber shared the results of more than 2,800 reviews of Sunshine Law compliance. The auditor’s office launched its StaRS (Star Rating System) program in 2019 in an effort to promote government transparency. In the first year of the StaRS program, STRS Ohio received the Highest Achievement in Open and Transparent Government Award, the highest possible rating from the auditor’s office. This rating was awarded to only 14% of audited entities. STRS Ohio was recognized for “Best Practices” in six areas."
How could an Ohio Retirement System be awarded an "open and transparent government award" after concealing a $525 Million loss (Panda Power) for over three and a half years? How could a State Treasurer 1. not know about this and/or 2. still present the transparency award???
The guy on the left, with a smile on his face, looks like the Executive Director of STRS, Bill Neville. The guy on the right, you ask? Looks quite a bit like our State Auditor!

Secrecy is the linchpin of abuse of power, . . . its enabling force. Transparency is the only real antidote.

~ Glenn Greenwald

Sunday, April 25, 2021

STRS Ohio to receive 3 audits in 2021

Audits await Ohio teacher pension

1 investment lost $525 million

Anna Staver

Columbus Dispatch

Posted in the Toledo Blade

April 25, 2021

COLUMBUS -- The State Teachers Retirement System of Ohio is getting three independent audits in 2021.
Two audits come from the Ohio Retirement Study Council, which advises state lawmakers on all five public pension systems.
The third audit, however, is sponsored by a group of retired teachers who say Ohio is mismanaging the pension fund while disseminating false and misleading information to stakeholders.
The Ohio Retired Teachers Association raised $75,000 for a "deep dive" into the pension fund's management, Dean Dennis said. STRS is supposedly doing well but retirees haven't had a cost of living increase in years.
It's time, Mr. Dennis said, to find out why.
All three audits will take months to complete.
"We never beat the market," Mr. Dennis said. "Yet we pay our investors anywhere from $9 million to $14 million bonuses every year on top of six-figure salaries to underperform the market."
It's true STRS' annual returns fall below the S&P 500 Index Fund, but that's because -- like nearly every other public pension system in the country -- it doesn't put all its money in the stock market.
Folks only need to look as far back as the 2008 stock market crash to understand why pensions diversity, STRS spokesman Nick Treneff said. Stock prices dropped more than 50 percent between October, 2007, and March, 2009.
In March it was reported that STRS lost more than half a billion dollars on a private equity investment in Panda Power Funds.
From 2011 to 2013, State Teachers Retirement System of Ohio invested $525 million with Panda but the investment is now valued at zero, according to Mr. Treneff.
How much gets put into each kind of asset is a big debate though.
"There is a general pattern of diversification, but they are not identical," RVK Investment consultant Jim Voytko said during a presentation he gave to lawmakers in February. "There is no formula that guarantees one asset allocation is better than another unless you are looking in the rear-view mirror."

A clarification from Bob Buerkle on a discussion re: reemployed retirees

Bob Buerkle clarifies status of rehired retirees

From Facebook 
April 25, 2021
Person A: My point is in response to your original post saying rehires and the district "shouldn't be required to pay 14% to STRS" Your words! I simply disagreed. Anybody (regardless of active or retire/rehire) needs to pay into STRS regardless of being active or retire/rehire.
Bob Buerkle to Person A: Person A, a little history about STRS Employer Contribution sharing with the reemployed retiree. When a reemployed retiree was paying 9.3% from 1994-2003 STRS actually matched the retiree's contributions at 10.5%. I believe this percentage match that was used due to the mitigating rate of 3.5% that STRS withheld from the employer contributions so the pension system would be held harmless, based on the new Alternative Retirement Pension option for those college professors who chose it. When the Member contributions were raised to 10% in 2003, the STRS Employer Match was still either 10% or 10.5%. In 2005 the STRS dropped the match for reemployed retirees down to 5%, or only half of the 10% that you were required to contribute. In 2012 STRS decided to keep all 14% of the employer contributions for themselves, thus driving your match down to 0% and that's where it has stayed ever since, sort of like our 0% COLA. THIS IS JUST ANOTHER EXAMPLE OF WHAT MAKES STRS A "TOP QUARTILE PENSION PLAN" THAT STRS MANAGEMENT KEEPS TELLING US OUR PLAN IS, YOU KNOW.
Person B: STRS keeps all of the matching 14%?", and none spoke up about this before now?!!!
Bob Buerkle to Person B: Person B , they not only keep all 14% of the Employer Contributions from the reemployed retirees, STRS is not using any of the 14% in Employer Contributions for the benefit of active teachers pensions as well. In fact, of the 14% of EMPLOYEE CONTRIBUTIONS, THEY KEEP 3.14% of that also. According to the STRS actuarial report for 2020 by Cheiron, on page 31, it states the entire pension that today's current teachers are working for has a value of only 10.86% of their earnings, even though they are being charged 14% for it every payday.
Larry KehresMount Union Collge
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