Saturday, March 12, 2022

Dean Dennis, strong teacher advocate, on why he endorses STRS Board candidates Julie Sellers, Steven Foreman and Elizabeth Jones who are committed to bringing about long needed change for all STRS stakeholders, active and retired

From Dean Dennis

March 12, 2022

Support Julie Sellers, Steven Foreman, and Elizabeth Jones. Read about needed changes!

ORTA, the Ohio Retired Teachers Association, has recently endorsed Sellers, Foreman, and Jones.
I also strongly endorse Julie, Steven and Elizabeth. Our Active and Retired teachers need these candidates at a time when some are trying to divide us. Sometimes we need to shake up the status quo. Everything we have been doing needs a fresh look. Reducing our unfunded liabilities by depending on the luck of a Bull stock market return AND transferring billions of dollars of promised retiree COLAs back to the STRS balance sheets isn't something STRS or Board members should be boasting about.
Active teachers should not have to work into their 60s. We need to work towards a formula change. Regarding the COLA, everyone needs a COLA in retirement. 
Here is what you may not know about the COLA. The gross lack of fair value on the Employees Contribution is largely because there isn't any COLA being factored into their contribution upon their retirement. When it is finally restored, watch what happens to the fair value. 
WE ALL need to work in the direction of restoring the COLA. 
WE ALL need to work in the direction of reducing the age 60 requirement (and then some). 
LASTLY, WE ALL NEED TO INCREASE THE EMPLOYER CONTRIBUTON RATE. At this point in time, under the Defined Benefit Plan, 100% of the Employer's Contribution is going towards paying off the unfunded liability PLUS around 3% of the Employee's Contribution. Immediately, the STRS Board should move to shift this 3% burden to the Employers Contribution rate.
At the last Board meeting I suggested they make this a resolution. Members should NOT be expected to supplement the Employer Contribution with their own monies while the Employer Contribution has remained stagnant for 38 years. 
Vote for change!

Tom Curtis reports on the 3/11/22 meeting of the Stark County Retired Teachers Association; speaker Gary Russell of STRS not happy with the questions asked

Tom Curtis' report on the 3/11/22 meeting of the Stark County Retired Teachers Association

From Tom Curtis 
March 12, 2022
Yesterday was the Stark County Retired Teacher’s Association Meeting. There were roughly 70-80 people in attendance. The speaker was the STRS Deputy Executive Director of Member Benefits & Chief Benefit Officer, Mr. Gary Russell.
I arrived early and stood outside and handed out THE MESS AT STRS flyer to everyone coming in. A few strong OEA supporters refused to take one, but many thanked me for the information, especially as soon as they saw the words, THE MESS AT STRS. As more people went in with the flyer it apparently became noticeable to the officers inside. The SCRTA president came out and asked me to stop passing them out and told me I was being unprofessional for doing so and questioned where the information came from. He refused to take one. I asked him if he would talk with me after the meeting, but I did not stop handing them out.
When I went in and sat down to dinner, people that had come in through another entrance came to me and asked for the flyer. That was awesome! The dinner was good and I was also able to garner some email addresses, during dinner and after the meeting.
Carol Kinsey, SCRTA ORTA Representative and ORTA Board Member, gave her report and indicated that different from ever before, ORTA had interviewed each of the 6 candidates for the 3 Board positions to be elected this year. She said that ORTA had decided, though not unanimously, that ORTA was supporting active candidates Steven Foreman & Julie Sellers and retiree candidate Elizabeth Jones. It is fortunate that she gave their names quickly, because many people kept asking her to repeat them, which she did. Carol has always been a staunch OEA supporter and is running for a position on the OEA-R Board this year.
The SCRTA president and I talked after the meeting. I tried to explain to him that I am not the enemy and that the STRS membership has to come together to stop the bleeding at STRS, yet he did not think it was appropriate for me to hand the flyers out. I also placed 3 copies of the listing of bonuses on each table of 8 people. The president held the flyer up as he spoke to the group and indicated that had not come from SCRTA and he had no idea if the information was correct. Only a few of each flyer were left on the tables afterwards, yet many of the handouts that were placed on the tables by the Association were left to be thrown away.
In my opinion, bottom line, Gary presented the information above [see documents below] in an attempt to convince retirees that if we receive a one-time 2% COLA, we should not expect that we will receive another one. He made it clear that any retiree that was within the 5-year window of no COLA would not be receiving the 2% COLA, if given. He gave numerous reasons why we should consider ourselves lucky for receiving what we are receiving now. He justified all of the bonuses and high pay for employees, saying they would go elsewhere if not given what he called market pay. I asked him how many staff left in 2008 when the Board did not approve a bonus? He did not like that question at all and did not answer it.
He highly emphasized the fact that the actives were paying such a heavy cost just to pay for us retirees. He said that they were paying in 14%, but 3.9% of that was going to pay for retirees. As we already know, STRS/OEA are trying to drive a wedge between actives and retirees. Management and the Board allowed this situation to come about and now they are trying to blame it on us for living too long.
All in all, it was the same old rubbish the STRS/OEA management have put out since 2003, except many of the names and faces have changed. STRS/OEA people have never had anyone truly put their feet to the fire like we have now and they are panicking. I can only pray that we are successful in adding some non-OEA members to the Board and that criminal charges will be brought forth for many of the staff.
The meeting did not go well for Gary. He became very defensive and angry and lost his patience as many people asked questions, and he gave no real answers. He simply sidestepped most questions. Go figure! One guy for a brief period was yelling at him because of the answer he gave concerning paying bonuses. He called me out when asking him questions by saying that he was not going to argue with me because that is all I ever want to do. I guess when you are the only one in the room that has 20 years' experience of working for change at STRS, it gives an STRS executive reason to demean the messenger of information they do not want to deal with. It did not work for him. It made people angrier and many became hostile concerning his answers to their questions.
The SCRTA president finally rescued him by ending the questions and thanked him for coming. Gary packed up his stuff and walked out of there as fast as he could. He was having no more of it. Do you think he had a pleasant drive back to Columbus?
Keeping their feet to the fire,
Tom Curtis
Correction: Carol Kinsey is a member of SCRTA and is also a Northeast Ohio ORTA Regional Liaison. She is not a SCRTA ORTA Representative; nor is she running for the OEA-R board. I thought she was running for an OEA position and was attempting to provide her with some support. My apologies for the errors. TC

Suzanne Laird to STRS: Current, active employees all over the state of Ohio are able to competently provide service in the cafeterias in every public school building, why can’t STRS?

From Suzanne Laird (Facebook)

March 11, 2022
Dear State Teachers Retirement System,
The public notice for the STRS Board meeting next Thursday was posted online this week. I notice it mentions that the cafeteria will still be unavailable to anyone, including stakeholders who paid for and are still paying for this facility.
I believe this is simply a hardship being imposed to deter stakeholders from attending Board meetings. You may disagree, and can prove me wrong by ensuring that the facilities be available to all who make the effort to attend public meetings.
After all, the State of Ohio has lifted most of the mandates imposed during the recent Covid pandemic, and that excuse is no longer valid. I believe cafeteria employees are still being paid to receive the food deliveries and provide access to fresh food for the few employees still present in the building, including Board members. You may check the attendance records for the past several meetings to gauge whether the cafeteria would be overwhelmed by accommodating the 20 or fewer stakeholders who generally attend.
Current, active employees all over the state of Ohio are able to competently provide service in the cafeterias in every public school building, why can’t STRS?
I look forward to this change being implemented by March 17, 2022, and communicated to the public via the STRS webpage.
Suzanne Laird

Wednesday, March 09, 2022

From Channel 10 ABC in Toledo: Ohio’s retired teachers frustrated with pension fund

From Channel 10 ABC News

Toledo, Ohio

March 9, 2022
Click the link above to view two related videos shown below as still photos.
TOLEDO, Ohio (WTVG) - Ohio’s retired teachers are fed up with their pension fund. They’re fighting to restore annual cost-of-living adjustments (COLA) meant to offset inflation.
Around 500,000 active and retired teachers are members of the State Teachers Retirement System of Ohio (STRS). The fund is one of the largest in the country with more than $98 billion in investment assets as of June 30, 2021, according to STRS.
It hasn’t dished out a COLA since 2017.
Retired teachers like Robin Frederick, who taught for 35 years in Tiffin City Schools, were told they had to wait five years after retiring to receive a COLA. She ended her teaching career in 2014 and still hasn’t received a COLA.
“I didn’t go into education because I thought it was going to get rich,” Frederick said. “I didn’t go in it for the income I went in it for the outcome. But I I never thought that I would sit here and say, ‘Wow, I can’t believe that I’m not getting what I expected to get when I retired.’”
Retired teachers used to get an annual 3% cost-of-living adjustment (COLA) up until 2012 when the figure was lowered to 2%. In 2017, the STRS board eliminated the adjustments altogether.
The fund was drying up.
It was impacted by the Great Recession. People are also living longer, meaning payments are extended over longer durations to retirees, according to STRS spokesperson Nick Treneff.
Treneff said the retirement system must look out for everyone it supports, including its newest teachers in the classroom and the roughly 200 retirees in Ohio are older than 100.
Current teachers contribute 14% of their salaries to the fund.
Jennine Kramer’s education career in Seneca County is now in its fourth decade. She already retired and started collecting her pension but had to re-enter the workforce as an education consultant to make up for the money she wasn’t getting from a COLA amid increasing healthcare costs.
“I’m dipping into my savings that I had hoped not to do yet,” Kramer said. “I was anticipating as I got older, that that’s what I was going to use to supplement my income. I didn’t anticipate doing that now. That’s a main reason why I’m back working part-time.”
Retired teachers formed a watchdog group to help examine the inner workings of the retirement system. They funded a study that accuses STRS of lacking transparency and paying out large bonuses to employees. STRS responded to the report and disputes its findings.
Treneff said the STRS Retirement Board is considering a one-time 2% COLA that could be voted on as soon as its next meeting set for March 16-18. He added that more one-time COLAs are possible in the future if the fund is still healthy.
That solution wouldn’t satisfy the concerns of many retired teachers like Kramer.
“They may think they’re going to pacify us, but it doesn’t solve the problem. You know, it needs to be a regular cost of living adjustment to for us to be able to you know survive on our pensions.”
Before changes went into effect in 2012, including lowering the COLA and increasing employee contributions, Treneff said the fund had 58 cents available for every dollar it brought in. Today, he said it has 88 cents per dollar. He said the changes, including halting the cost-of-living adjustments, were needed to prevent the fund from further dropping.
Treneff said the fund saw a 29% investment return last year, one of the highest figures in the last four decades. It added another $14 billion to the fund’s bottom line, giving the Retirement Board the ability to explore a possible one-time COLA.
State lawmakers have proposed various pieces of legislation aimed at addressing STRS.
Sen. Teresa Fedor (D-Toledo) introduced a bill to reinstate the adjustments and create a 2% COLA floor. She said she hopes the bills start conversations among lawmakers about the issues surrounding the pension fund.
“It’s something that we must figure out,” Fedor said. “The promise was made years ago. Some people haven’t had their COLA in seven years when they retired early with the promise of a COLA being included...So we need to explore the options to reinstate the COLA.”
Rachel Hopple, who retired in 2013 after working in Tiffin for 35 years and has never received a COLA, said recent spikes in inflation have brought the issue even further to the forefront.
Read the rest of the article here.

Active teachers - you need to read this one!

Sweet Deal?

From John Curry
March 9, 2022
Don't you just love public documents? Following are two pages of a public document between the Elida (Ohio) Local School District and the Ohio Education Association and the former OEA Secretary/Treasurer Tim Myers. While serving as Secretary/Treasurer of the Ohio Education Education Association Tim was "on leave of absence" from the Elida Local Schools....just like today's OEA officers are also on leave with their respective school systems so that they can work full time for the OEA. 
Yes, the OEA did compensate the Elida schools for all of these costs while he was on leave and an additional fee for handling the paperwork. This procedure follows the Ohio Administrative Code and is perfectly legal. 
What I find interesting, in the second page below, is the fact that, while on leave, this OEA full time employee HAD HIS STRS CONTRIBUTION RATE PICKED UP BY THE OEA! How many of you OEA active teacher members have YOUR current 14% STRS contribution of YOUR paycheck picked up by the OEA? Don't laugh.....YOU ARE PAYING FOR THS SWEET DEAL!

Tuesday, March 08, 2022



Steven Foreman and Julie Sellers are running for two open active teacher seats and Elizabeth Jones is running for the one open retiree seat on the STRS Board. If you have heard about the mess at STRS, these are the best people to vote for to clean it up. If you vote for OEA-endorsed candidates, you are voting for people who will gladly take more of your money to add to those humongous salaries and bonuses that are handed out freely at STRS, whether they are earned or not. Active teachers, remember OEA loves you for the insanely high dues you pay them so they can have nice, hefty salaries the likes of which you will never see. You can find them listed on this blog, posted here:

Monday, March 07, 2022

How can we ever trust another STRS Board election after what happened in 2013? Will we always have to guard against deceptive ballot language? You bet! Read on!

Dennis Leone tells us the story of the infamous STRS Board election of 2013

From Dennis Leone, STRS Board member 2005-2009
March 6, 2022
There were 4 people running for 2 retiree slots in 2013. The ballot deceived retirees, who intended to cast a single vote for me, into thinking that they needed to cast a second vote in order for their single vote for me to count. When retirees clicked that they were finished voting, the voting system informed retirees voting that they had a second vote they still needed to cast.  A single vote for me only was not accepted by the voting system UNTIL the voter rejected the second vote instructions.  
This positively helped the other 3 candidates and it made a difference in the final outcome. McGreevy and Stein were re-elected by a slim margin. I will always feel that I would have come in first or second had it not been for the screwed-up system in effect that year.  
I believe in subsequent years, the voting system was changed and became more clear about voters NOT needing to vote for more than one candidate. I also became aware that when I complained to the STRS Board about the 2013 election, the Board discussed the matter in executive session which was a flagrant violation of Ohio’s Sunshine Law. Public bodies often wrongly think they can discuss a matter in executive session if they feel it will become litigation. Wrong. A legal matter can be discussed privately in executive session ONLY AFTER A LAWSUIT HAS BEEN FILED, NOT BEFORE.  
I do not recall the name of the other retiree who ran in 2013 and finished 4th.   After she learned what had happened in the voting system, she called me to say that she wished she had not run because her votes most certainly would have gone my way, and I would have won by a large margin (like I did in 2006).  Not wanting increased oversight on my part, the STRS Board, ORTA, and OEA were very happy that I was not elected in 2013.  
OEA, in particular, campaigned hard against me, communicating strongly with recent retirees who did not have the benefit of knowing how the Board wasted money in past years.  OEA also did not want active teachers to know that their own OEA leaders knew what was happening at STRS and that they were spending money in the very same wasteful way that Board members and STRS staff members did.
ORTA officers later apologized for their efforts against me and for their can’t-we-all-just-get-along STRS-cheerleading posture. ORTA’s leadership was in la-la land for many years about STRS.  Fortunately, that is not the case now with the current ORTA executive director. End of story. Attached is a one-page summary of what I published in 2005 about prior STRS misdeeds [see below]. This report was scorned by the STRS Board, the STRS Staff, OEA, and ORTA. Times change………I guess.
Dennis Leone  

Ohio Retirees Tom, Dick and Harry and their death benefits

From John Curry

March 7, 2022 Retired Ohio teachers want to look at documents in STRS pension; they’re fighting in court to get them

Retired Ohio teachers want to look at documents in STRS pension; they’re fighing in court to get them
Retired Ohio teachers want to look at documents in STRS pension; they’re fighting in
March 7, 2022
COLUMBUS, Ohio -- Retired Ohio public educators haven’t received a cost-of-living adjustment for the past five years.
Unsatisfied with the pension system’s answers as to why, a group of teachers hired a nationally renowned pension expert who has been battling the State Teachers Retirement System of Ohio for information to obtain a clearer picture about management and activity in the pension.
The fight could result in Ohio Supreme Court rulings and changes to state law that would force more disclosures and transparency from all five public employee retirement systems that serve 485,000 retired state officials.
However, no other retirement system has been as beset by strife lately as the teachers’ pension.
The State Teachers Retirement System of Ohio, called by its acronym STRS and pronounced as “stirs,” is one of the largest public pension funds in the U.S. It has just under $100 billion in investment assets and serves about 500,000 working and retired educators of Ohio public schools.
STRS officials told retirees withheld cost-of-living adjustments from 2017 to 2022 to shore up cash for roughly three reasons:
The pension lost money after the recessions of 2001 and 2008. People live longer these days, and it needed more money to cover teachers’ longer lifespans. The overall contributions from teachers and the state into the pension dropped from what was previously projected due to fewer people contributing to the fund or salaries being lower than expected, STRS spokesman Nick Treneff said.
But Robin Rayfield, executive director of the Ohio Retired Teachers Association, which represents about 20,000 retired teachers, questioned why these problems came to a head during the recent bull market.
“The stock market has never done better in the history of the stock market,” he said.
Rayfield said that retirees had mapped out their futures with cost-of-living adjustments in their financial plans.
Ohio public employees generally don’t receive Social Security in retirement because they receive pensions.
“I worry about those most elderly and most vulnerable,” he said.
This year, the STRS board is considering a one-time, 2% cost-of-living adjustment for eligible recipients and may vote on it as soon as later this month, Treneff said.
Enter Ted Siedle
Last year, the Ohio Retired Teachers Association raised $75,000 through crowd fundraising to hire Edward Siedle, a Boca Raton, Florida, attorney who used to work for the U.S. Securities and Exchange Commission and now investigates the management of public pensions.
On Feb.19, 2021, Siedle said he requested a prospectus of every stock, bond and mutual fund in which the pension invests. Prospectuses are documents investors file with the SEC that show opportunities, risks and other financial details about an investment.
Siedle also asked for documents on the pension’s “alternative investments,” including hedge funds, venture capital, private equity and real estate. Alternative investments make up at least 27% of the pension’s investments, he said.
“They haven’t given us a single document,” he said. “Not one.”
STRS disputes that characterization.
“Over a period of three months, from February to May 2021, STRS Ohio sent 24 emails and a thumb drive to (the attorney representing Siedle) amounting to 812 documents and over 22,000 pages,” it said in a document responding to a preliminary report Siedle wrote for the retired educators.
STRS also said that the February 2021 public records request didn’t use the word “prospectus.” It said that the requests in most cases were overly broad. STRS employees provided Siedle with several links to financial reports on the STRS website so he could understand how its documents were maintained and organized and to amend his request to get the information he needed.
Sometimes, journalists and members of the public, when they get an understanding of how public information is maintained, reach out again to the state agency and amend their public records requests. Siedle never did that, STRS said.
Siedle said the documents produced were not what he requested.
“You don’t measure transparency by counting paper,” he said. “You give me 20,000 pages of documents I didn’t ask for. Then you make me go to court.”
Former Ohio Attorney General Marc Dann represents Siedle in a public records case before the Ohio Supreme Court. Dann is working on a contingency, meaning he will get paid if Siedle and the retired teachers are successful.
The first public records case Dann brought was against STRS and a Toronto, Canada, firm that helps STRS develop benchmarks to measure how the various funds in the pension are performing compared to the market and similar funds.
Dann said that STRS and the firm ultimately turned over the benchmark after mediation. It is the first of what Dann anticipates will be several public records cases before the state’s high court.
Dann has contemplated suing STRS over how it managed the funds.
“If I sue the pension, all they have to pay with is the money of the members, of the participants,” Dann said. “That would be a circular enterprise. I think the remedy here is political in that the legislature needs to put better guidelines and guardrails on STRS and other pension funds. The investment funds need to be more transparent.”
Last June, Siedle sent the retired teachers a preliminary report about his findings. However, it won’t be final until Siedle gets all the outstanding documents and can draw conclusions, he said.
The report identifies several potential fees that STRS may have paid to Wall Street for hundreds of millions of dollars, including a potential $143 million that STRS might have paid investors to manage money that it hasn’t received yet, he said.
Siedle determined that STRS has entered into agreements for alternative investments in which it only paid part of the total investment but has “committed” to pay the rest in the coming years. He said the total committed but not yet paid amount is $7.1 billion.
It’s relatively common for private equity and other alternative investments to charge investment management fees on that committed amount. He assumed that STRS paid 2% in fees on total unfunded commitments, which is an industry average. He said that that totals $143 million a year, or enough to restore the cost-of-living adjustment to 2%.
“Fees on committed, uninvested capital amount to paying managers for doing nothing -- no service whatsoever is provided in exchange for the lavish fees,” he wrote in his preliminary report. “In our opinion, such fees add insult to injury since these types of investment funds already charge exponentially higher fees than traditional stock and bond managers.”
He noted that in 2014, the SEC announced research saying that there were too many “hidden fees” in private equity and other alternative investments that were unjustified. Most investors are not aware of them, it said.
Siedle suspects STRS is paying the fees since most pensions pay them. Only a minority of pensions have employees who are savvy enough to recognize they’re going to be saddled with those fees and to negotiate to eliminate them before they begin investing.
“There’s no question the staff has been complicit with Wall Street,” he said. “Where do these arguments come from? They come from Wall Street, where secrecy is a good thing.”
STRS, however, shot back in its response to Siedle that it is not paying Wall Street for “doing nothing.” With committed funds, fund managers watch investments and determine the best time for the investor to get in. This takes market research, travel and due diligence. These activities require upfront fees, it said.
“Actual management fees paid on unfunded committed capital during calendar year 2019 were $59 million,” it said, or just 0.8% on the $7.9 billion in uncommitted capital, below Siedle’s estimated 2%.
STRS said in its counter-report that this is just one of several allegations in Siedle’s report that aren’t supported by evidence.
“Many of the conclusions in (Siedle’s) report are offered with little support other than the Author’s opinions,” it stated. “In fact, the phrase ‘in our opinion’ is used approximately 60 times throughout (Siedle’s) report.”
STRS said it follows Ohio’s public records law, but there are exemptions under Ohio’s Uniform Trade Secrets Act The act says business and financial information that generates independent economic value by generally not being known to others can be exempt from public records laws. An entity, such as a money manager, can assert a trade secret claim, and the public office cannot release the trade secret unless the entity consents.
Motivated by findings in Siedle’s report, retired Wright State University economics professor Rudy Fichtenbaum got elected to the STRS board in September. Through his own analyses, he said that STRS is paying higher U.S. stock brokerage commissions than paid by the state’s biggest retirement system, Ohio Public Employees Retirement System -- which has 1.2 million members who are elected officials, state and some local government employees and $114 billion in assets.
He also compiled data to show that salaries at STRS are higher compared to OPERS salaries.
Treneff, the STRS spokesman, said the agency set its employees’ salaries by comparing it to comparable work in the finance market where STRS employees could work, such as Huntington National Bank and Merrill Lynch. It has found its salaries are aligned with the market rate.
STRS’ average salaries appear higher than OPERS, Treneff said, because STRS found it’s more cost-effective to employ real estate experts internally. OPERS’ real estate experts are outside contractors, he said.
$525 million loss
Dann, the attorney representing Siedle, expects he’ll next have to go to court to get more information from STRS about Panda Power Funds.
Between 2011 and 2013, STRS invested $525 million in Panda Power Funds, a Texas-based private equity firm that invests in natural gas and solar projects.
The investment now has a value of zero, Siedle said.
Treneff, the STRS spokesman, said that Siedle is cherry-picking certain investments to highlight while ignoring the success of others.
The Panda “investments were negatively impacted by the decline in energy prices during the mid-2010s and decreased in value beginning in fiscal 2017, as reported quarterly to the board,” he said. “The Panda investments were valued at $0 as of June 30, 2020. While the Panda investments lost value, it is worth noting that over 85% of STRS Ohio’s alternative investments have had positive returns.”
Pension oversight
After Siedle released his report, he said that Ohio Auditor Keith Faber’s office started an audit into the pension system. A spokeswoman for Faber confirmed an audit is ongoing but said the office doesn’t discuss unfinished work.
STRS began cost-of-living adjustments in the 1970s. They were recently fixed at 3% a year until 2012 when they were reduced to 2% a year. Then in 2017, they went away, Treneff said.
In 2012, the legislature passed a law that changed how the pension was managed, including allowing the STRS board the flexibility in determining the cost-of-living adjustment, Treneff said.
The board requested the changes in the bill, he said. STRS officials proposed the changes first with the Ohio Retired Teachers Association, the Ohio Education Association, the Ohio Federation of Teachers and others.
“They agreed to that package of changes,” he said.
Many public pensions were overhauled across the country after the 2008 recession, he said.
“I don’t think the board or our constituents ever assumed we would have to eliminate the (cost-of-living adjustment,)” he said. “But unfortunately, that’s where we were by 2017.”
Before the 2012 changes, the pension had 58 cents for every dollar it expects to pay out in the future. Since then, the fund has rebounded to nearly 88%. Estimates showed that without the changes in 2012 and 2017, the pension would be about 57% funded, Treneff said.
The Ohio Retirement Study Council comprises members of the legislature and board members of the five public pensions and oversees the five pensions. It’s supposed to perform two audits every decade of each pension: an independent fiduciary performance audit, which studies how the pension’s management, and an actuarial audit, which studies whether and how the plan can deliver on its promises to current and future retirees.
Both audits are overdue, Siedle said.
Rep. Brigid Kelly, a Cincinnati Democrat who sits on the Ohio Retirement Study Council, said the audits of the STRS pensions are underway.
Kelly said she understands the concerns of the retirees, who thought they were on track to retire, but the rules changed in the middle of the game.
“The fact that so many people felt compelled to spend their own hard-earned money in a study indicates there’s an issue,” she said. “I think transparency, especially when you talk about taxpayer money, is a good thing and a necessary thing.”
Kelly is sponsoring with Republicans three bills that she believes will go a long way in providing retirees and taxpayers transparency and accountability.
Read the rest of the article here.

Edward Siedle: A Year Of Pernicious Stonewalling At Ohio Teachers State Pension


Mar 7, 2022
A Year Of Pernicious Stonewalling At Ohio Teachers State Pension
Edward Siedle
Pension forensics expert and record-setting whistleblower award winner
For over a year, the $100 billion-plus State Teachers Retirement System of Ohio has refused to disclose critical information regarding its riskiest investments— information requested by tens of thousands of deeply concerned school teachers whose promised retirement benefits have been slashed. Public scrutiny of the state fund’s investments has been effectively thwarted by pension officials working in concert with Wall Street money managers to avoid legally-mandated transparency. Worse still, stonewalling has enabled the fund to potentially mislead participants regarding the fees, risks, and performance related to its investment portfolio.
“Read the prospectus before you invest” is the oft-stated mantra of every federal and state securities regulator. That’s unquestionably sound advice, but if prospectuses are withheld from disclosure by state pensions—even after investment decisions have been already made —participants can’t possibly read and understand the fees and risks related to the investments they depend upon for their retirement security.
A Year of Pernicious Stonewalling
In early 2021, I was retained to conduct a forensic investigation of the $100 billion-plus State Teachers Retirement System of Ohio on behalf of 20,000 members of the Ohio Retired Teachers Association (ORTA).
ORTA members were deeply concerned—for good reason—that slashing of Cost of Living Adjustment (COLA) benefits they had been promised was due, in whole or in part, to mismanagement of their pension’s investments. The retired teachers wanted a “second opinion” by a nationally-recognized expert—one of their own choosing—who had far more experience in pension matters than STRS’s largely lay board of trustees and staff responsible for overseeing and managing the investments.
A deep-dive into the pension’s investments necessitated accessing the relevant investment documentation through a public records request since the information was unavailable on the pension’s website.
On February 19, 2021, former Ohio Attorney General, Marc Dann, filed a request pursuant to Ohio Revised Code Section 149.49, et seq. with the State Teachers Retirement System of Ohio for an opportunity to inspect or obtain copies of public records related to the Ohio pension’s investment managers, investment consultants, performance compliance auditor, investment cost monitor, financial auditor, and custodians, as well as board and staff.
This public records request, filed on my behalf, included critical information regarding the pension’s riskiest “alternative” investments, such as prospectuses, offering memoranda, subscription agreements, limited partnership agreements, sideletters and tax returns.
In response to my public records request, I got none.
Not a single document I had requested regarding the riskiest investments was provided to me to review on behalf of retirees.
Accordingly, on May 21, 2021, former Ohio AG Dann filed a complaint for writ of mandamus with the Supreme Court of Ohio seeking some of the public records we had been denied and Dann is preparing to file additional actions relating to other records.
In June 2021, after months of stonewalling at STRS regarding the investment documents requested—and with no end to secrecy in sight—I chose to issue a Report of Preliminary Findings entitled The High Cost of SecrecyThe Report noted:
“Alarmingly, our investigation reveals that STRS has long abandoned transparency, choosing instead to collaborate with Wall Street firms to eviscerate Ohio public records laws and avoid accountability to stakeholders. Predictably, billions that could have been used to pay teachers’ retirement benefits have been squandered over time as transparency has ceased to be a priority.”
The investigation revealed there were ample funds available to pay the COLA retirement benefits promised to teachers—had pension assets been prudently managed.
More recently I filed a complaint with the Ohio Department of Commerce, Division of Securities regarding the STRS failure to disclose prospectuses and other offering materials to participants. Last I heard, the Division of Securities was investigating my complaint.
Since release of my Preliminary Report, the only two STRS board members possessing financial expertise have publicly agreed with its damning findings and the State Auditor has determined the Report provided a “reasonable basis” for a special investigation on his part. While the State Auditor has requested the very same information from STRS that I requested, it remains to be seen whether STRS will provide the Auditor with documents it has denied teachers whose retirement savings are at risk.
Secrecy Conceals Incompetence and Mismanagement
It’s no secret why public pensions in Ohio and elsewhere embrace secrecy: because transparency and public scrutiny will expose incompetence and mismanagement. For example, STRS staff has represented to retirees that, contrary to SEC pronouncements, investment performance fees are not fees and that the fiduciary standards the state pension is subject to are every bit as comprehensive as those under the federal law applicable to corporate pensions, ERISA— also utterly false. That’s what I call “gross malpractice generally practiced” in my book, Who Stole My Pension?
Read the rest of the article here.

Sunday, March 06, 2022

STRS Board member Dr. Rudy Fichtenbaum takes STRS Board member Rob McFee to the woodshed on Facebook!

From John Curry

March 6, 2022
This is also known as "educating the educator!"
Looks like STRS lost a ton of money on Russian investments!
Thank you, Rudy!
Posted on Facebook by Rudy Fichtenbaum, March 6, 2022
Rob McFee, prior to the Russian invasion of Ukraine STRS had approximately $22 billion in international stock investments. Approximately 21% of these stock investments were in Emerging Markets and of that 4.3% was invested in Russia. That is approximately $194 million and now you are telling us that we have $50 million. I am just a retired Professor of Economics and have never taught mathematics but by my calculation that means STRS just lost $144 million. This loss is equal to approximately 7% of the contributions that active teachers make to STRS in a year. In the MSCI index for Emerging Markets Russia accounts for 3.6% and yet STRS had invested 4.3%, so we were significantly overweight. The bet on Russia was primarily being made by our own investment staff with internal investment accounting for 77.5% of the Russia investments. Speaking of investment decisions made by our staff, you haven’t responded to my email on the Benchmark Scam. Since you have decided to venture into the Members Only Forum, perhaps you would like to respond here. I am sure that the Members would like to hear your response.

What one large Ohio teacher organization tells its members about the STRS bonus program; it's slightly (?) different from what a REAL expert says about it

From John Curry

March 5, 2022
One teacher organization is telling their members that a significant bonus program is needed to keep first class investment experts at STRS. Here is what a real expert has to say about the STRS bonus structure:
Ohio STRS Salaries & Bonus Structure
By Chris Tobe, CFA, CAIA
October 19, 2021
Ohio State Teachers Retirement System has some of the highest compensation in the nation among public pension employees despite a lower cost of living and private salary competition in the Columbus Ohio area.
is a bonus program, that these overpaid public employees actual help set and control, with little oversight or transparency. With the high return of FY ending June 30, 2021, these bonuses could hit outrageous levels.
It is crucial that the setting of bonuses for FY 2021 be a transparent process with extensive trustee oversight by the complete board.
The latest Ohio Checkbook website maintained by the Ohio State Treasurer and Budget office, only shows STRS salaries for 2019. Other Ohio plans have disclosed 2020 salaries. This is a major violation of Transparency that should not be tolerated. The Ohio Retirement Study Council (ORSC) which is supposed to provide legislative oversight has not in this case, but this general lack of accountability is not unusual and is broadly documented in the ORTA Forensic Audit of June 2021.
For 2019 for total compensation STRS had 7 investment officers making over $500,000 a year. Another 7 made between $400-$500,000 a year. 16 making between $300-$400k a year. 35 make between $200k-$300k a year. STRS has 65 people making over $200 thousand a year which is at the top of US public pensions compensation. In adjoining states - Michigan has only 5 investment officers making over $200 thousand a year. Indiana and Kentucky have only 2 (CIO & ExDir) over $200 thousand.
STRS 2019 base salaries are much lower but still way above national averages. The Chief Investment Officer (CIO or Dep.Ex.Dir Investments) base salary was $381,390. 5 others make over $300k in base. 9 more make -$250-$300, in base, 17 from $200-$250. This means over 30 staff making over $200,000 a year in base salary. While the CIO base (most have no bonus) is not out of line the next level of high salaries is extremely unusual.
There are few national public salary databases, but a group called Pension360 collected them in 2014. They found a lot of Chief Investment Officers making in the $200--$250 like Illinois Municipal, Illinois State, Louisiana State, Los Angeles Fire & Police, Maryland Public, Texas Municipal. Georgia Teachers CIO made $144 thousand a year. South Carolina CIO made $178 thousand a year, Iowa $159 thousand, Arizona $189 thousand. And of course, lower-level investment staff almost all made under $200,000.
Another academic study released in 2021 looked at Chief Investment Officer salaries at the top 100 public plans in the U.S. Their mean total compensation salary plus bonus is $263,043, with mean salary is $237,207. Given STRS size the 75th percentile could be found appropriate given Columbus cost of living. So total compensation for the 75th percentile was $318,362 with salary being $300,132 for CIO. 90th percentile which I believed should be large coastal plans with mean total compensation of $504,854 the mean salary was $408,983.
There are no indications that STRS staff are any more qualified than average in public plans. Many are CFA charter holders but few if any seem to have any national stature or publications in the investment industry, or any indication that they are sought after by the private sector. In fact, private sector investment salaries in Columbus area seem to be much lower than those at STRS as indicated by staff moving from JP Morgan and Nationwide. STRS with over 65 people making over $200 thousand a year in total compensation may make it clearly the highest paid (with possible exception of much larger mega CA plans).
The amount of highly compensated employees is also unique. OPERS who is near the top in compensation can only look better by comparing itself to STRS in the 2020 OPERS investment plan. OPERS justifies its 62 investment employees given there $100 billion in total assets, only looks reasonable when compared to STRS 91 high paid investment employees with less assets of $78billion.
In my opinion a salary cap of $300,000 for top 2 STRS employees with a $200,000 cap for rest of employees would be a market rate for the region.
The majority of public pensions do not pay a bonus because of a general aversion to public employees getting a bonus and the potential conflicts of interest. Even fewer pensions pay a bonus to investment officers below the CIO.
The bonus structure of STRS is unique in its size and lack of transparency. STRS has still not reported to the Ohio Checkbook for the 2020 bonus.
The prior academic study released in 2021 looked only at Chief Investment Officer bonuses. In the 75th percentile in plans the mean bonus was $18,230 or 6% of salary. In the 90th percentile in plans the mean bonus was $95,871 or 23% of salary. These bonuses are way out of line with national norms for public pensions.
In 2019 the last year STRS provided data one officer William Shurman got a $280,847 bonus at 97% of his salary. STRS had 8 officers making over $200,000 in bonus. Another 24 made a bonus between $100-$200 thousand most around 75% of salary.
The conflicts of interest given the power of staff over their own bonuses are extremely disturbing. How much is subjective by the CIO based on his perceived worth which may include areas like personal loyalty. How much is supposedly objective on investment performance.
The 2021 Forensic Audit strongly suggests that both investment performance and benchmarks were manipulated by staff. The staff has a strong incentive to manipulate performance numbers to enhance their own bonus. Their ability to create bonus of 4 times the other top public plans is especially troubling.
Alternative investments especially Private Equity and private debt are valued by their managers with little or limited outside independent valuations. These alternatives many with performance-based fees means managers have a vested interest in higher performance to enhance their own bonus. The Ohio STRS commented that they have advisory seats on most of these alternative partnerships. Therefore, both Private Equity staff and Ohio STRS staff share an interest in showing higher performance numbers to increase their own compensation.
These extreme conflicts of interest combined with the Siedle Forensic Audit may attract some attention from the SEC and/or FBI if not immediately addressed.
My recommendation would be to go with national norms, close the potential conflicts and eliminate the bonus. At least it should be capped at $75,000 a year or 25% whichever is less.
Ohio STRS compensation is too high in almost every measure. Ohio educators are not paid in the top 1% and see this overcompensation of the people entrusted to manage their retirement as an inappropriate expense.
My recommendation which would still put them in top quartile of compensation would be a cap of $300,000 a year in salary on top 2 and $200,000 on other employees. On bonus I would recommend they be suspended immediately, and perhaps permanently. If decided to be reinstated it should be a board driven transparent model with a limit of 25%.
~ ~ ~ ~ ~
Chris Tobe, CFA, CAIA, author of “Kentucky Fried Pensions” currently serves as the Chief Investment Officer of the Hackett Group which consults to Public Pension plans where in 2016, he completed a major investment audit for the $40 billion Maryland System in 2015 he completed an investment performance review of the $26 billion Utah Retirement Systems. From 2008-2012 he served as a Trustee and on the Investment Committee for the $13 billion Kentucky Retirement Systems. From 2008-2009 he was a Sr. Consultant with NEPC and worked with a number of public pension plans in OK, MO, MI, DC. From 1997-1999 he worked with KY Auditor Ed Hatchett and published a report on the investments of both KRS & TRS Systems. He earned an MBA in Finance and Accounting from Indiana University Bloomington and his undergraduate degree in Economics from Tulane University. He has the taught the MBA investment course at the University of Louisville and has served as President of the CFA Society of Louisville. As a public pension trustee in 2010, he completed the Program for Advanced Trustee Studies at Harvard Law School and in 2011, the Fiduciary College at Stanford University. See more at
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