Saturday, April 22, 2023

Dan MacDonald's report on the April 20, 2023 STRS Board meeting


For me, the STRS Board meeting started on Wednesday, April 19, when the Investment Committee met in the afternoon to interview two alternative investment consultants, Albourne and Callan. Ultimately, Callan was offered the contract as discussed, determined and voted by the Board at the end of Thursday’s Board meeting.
After call to order and the approval of Board minutes, Mr. Neville addressed the FY2024 Budget. Initially departments’ submissions would have raised the budget by 5.9%, but Neville said he pushed back and now is under a 3% increase. Additionally, he wanted to make it clear, that the Performance Based Incentives for FY2023, come out of FY 2024 budget. In May’s Board meeting, the PBI policy for 2024 will be discussed and voted.
The Finance Department then presented the proposed budget with emphasis that STRS Ohio “exists for the members;” that is its mission: “to serve Ohio’s public educators.” Emphasis was placed on transparency, acknowledging monthly expense reports that are detailed and an actual vs budget report printed in Routine Matters handout of each Board meeting. 
Operating Budget: Total compensation will be down by $618,100, -1%, [but remember that last year STRS staff received an additional full check because of the way the payroll calendar rolled out to 27 weeks vs. the usual 26 weeks. From Google: “The 27th pay cycle -- for workers who get paid weekly or every two weeks -- happens because of what's called "payroll creep," when an extra day each year creeps into the calendar.”
School Districts do not do payroll the way STRS does payroll. Your salary is your salary and that’s what you get. More specifically, last year’s budget slide states “27th pay accounts for $2.1 million of the $2.6 million increase” for FY 2023 budget. None of this was, of course, was mentioned.]
Incentive compensation is up $2,600,000 or 30.6% [Think Performance-Based Incentives and Neville’s opening remarks]. Fringe benefits up $1,238,800 or 6.5%. Professional and technical services up $503,300, or 4%. All other operating expenses down $623,800, or -4.7%. The proposed budget includes a 2% pool for merit-based increases and promotions [Think pay raises for most]. Bottom line, operating budget is up 2.8%, well under the initial 5.9% departments requests.
Capital Budget: Information processing and computer software is up $1,774,900, or 32.3%. Building improvements, maintenance and office are down $1,292,900, or -54.7%. Bottom line, capital budget up 6.1%.
The Investment Department report was brief. The preliminary total fund return for March was a +1.21% gross. The preliminary FY 2023 total fund return is estimated +4.29% gross; +4.20% net. Total assets ended March at approximately $88.1 billion, higher by $500 million in FY23.
There were eight speakers during Public Participation. Two addressed recent new social media distributions from STRS, The Real Facts and The STRS Ohio Reflection Series. One  addressed misinformation vs honesty and integrity praising STRS. Two addressed the current election and dangers [of which one pointed out multiple robocalls to actives regarding the current election]. Three addressed benefit losses.
After lunch the Finance Department had consultant Cheiron share with the Board Economic Assumptions for the June 30, 2023 Actuarial Valuation. Cheiron pointed out that the plan has significant negative cash flows. Normal cost + interest is not being met by contributions. Bottom line, Cheiron said to stick with current assumptions: Discount rate at 7%; Inflation at 2.5%; Payroll growth at 3%.
With that out-of-the way, Cheiron than presented its Sustainable Benefit Enhancement Plan. Cherion developed 3 fiscal integrity tests to evaluate whether an enhancement would materially impair the fund’s fiscal integrity. Two of three tests arrived at zero dollars available, the third, $300 million. All three tests needed to be passed, therefore $0.00 available. Much discussion followed on the numbers used being too cautious.
Then Cheiron presented the “De Minimis Enhancement.” Cheiron determined that in the event the SBEP {Sustainable Benefit Enhancement Plan} budget is zero, a de minimis enhancement that would not materially impair the integrity of the system might be available. The de minimis enhancement amount could not be more than 1% of the actuarial value of the assets, provided the Plan is projected to be fully funded in 20 years or less after the inclusion of the de minimis enhancement. In 2023, for the FY2024 budget, a de minimis enhancement of up to $0.83 billion [$830,000,000] would not materially impair the fiscal integrity of the system.
Lively discussion followed by all Board members. Correthers mentioned actives first. Many addressed splitting. Steen mentioned a 0.9 COLA plus contribution deduction for actives from 14% to 13.7%. Exploring actives going to 34 years for full benefits would cost approximately $1.33 billion, therefore out of range. Pushing the amount available to a higher level was explored. Infinite choices.
[I need to make comment, and I think, I need input. $0.83 billion is a lot of money, but not enough to bring back a permanent COLA, nor to reduce a year, 35 to 34, for actives to be able to have a full retirement package. Last month’s financial report stated above we are only $500,000 above last fiscal year's closing. At one time during the past couple years, the general fund was approximately $94.8 billion. We are NOW at approximately $88.1 billion, as written earlier in this document.
Within Cheiron’s 3 tests, one formulated to $300,000, the other two tests came out as $0.00. The general fund, FY2022 closed at 78.9% funded. Taking $0.83 billion for enhancement, against a fund that is only $500,000 ahead of last year’s closing puts further strain on the fund $830,000,000 - $500,000. 
This doesn’t make sense to me. You? A benefit enhancement now, puts off something permanent. Believe me, Board members and STRS leadership desire to give; that is clear, but is it best? I personally think the de minimis money should remain in the general fund until the market recovers and a sustainable benefit enhancement can exist. I need and want input from actives and retirees.]
The meeting concluded with Routine Matters, [the transparency portion of the meeting], and under new business a report from Correthers on a workshop she attended and a vote for Callan as Alternative Investment consultant. The next Board meeting is slated May 17, 18, 29 with the Board meeting on the 18th.
Dan MacDonald, Executive Director, Local 279-R

Dan MacDonald to STRS Board: What you seek is what you get


Dan MacDonald's speech to the STRS Board
April 20, 2023
Good morning STRS Board. I am Dan MacDonald, an STRS retiree with 38 plus years of service. I am also the Executive Director of Local 279-R, Northeast Ohio AFT retirees.
What you ask is what you get. The STRS Ohio Reflections Series has started and I click on each participant. I also read The Real Story, Part 1 and 2. I’ve also started reading Keith Faber Special Audit.
Did you catch, as I did, within the “Ana” video where she stated “That’s my income” and that she was thankful that STRS had her back because her retirement was “the furthest thing from my mind,” and Mr. Price, you commented earlier on the new 23 year old teacher. It also sounds like she didn’t follow STRS advice that members should have, and point out statistically, other sources of income. The latest, the “Yvonne” video, does address her pension as a “nest egg” and she mentioned “other financial decisions.” Recent STRS advice followed, but it wasn’t always there. As I stated, what you ask is what you get, and STRS found at least 11 for the new series to get what they asked.
If you think this series is really going to change attitudes, I can say it is a start, but not what most of my membership believes. I request balanced reporting. As a colleague emailed me, “Nice propaganda!!! A message to Mac, “You just enjoy your retirement & let STRS do the thinking.”
Which leads to April, May and June. Important months for STRS and the Board. The 2024 budget is being presented today. Will there be a merit-based 3 percent raise in the 24’s budget? I’ll be shocked if there isn’t. Maybe the Real Story can trace a 3% yearly raise back to the 90’s, or is it the 80’s? I don’t know, does any Board member know when the yearly 3% in the budget started?
It is also time for Policy review, Performance Based Incentives is policy. Changes, if any, will be voted. The PBI policy will be voted. Will any of you step forward and present a substantial change, or changes? Have all of you read the document so you are prepared? As a start, is it time to remove smoothing?
What you ask is what you get. I am asking. I am asking the Board to shake up the budget and PBI policy.
As always, actives need their future benefits enhanced and retirees need their COLA fully restored.

Friday, April 21, 2023

James Carr: The STRS hierarchy needs to be held accountable; if they can't get the job done they need to be replaced.

By James Carr

Posted in Ohio STRS Member Only Forum

April 19,2023

I believe almost everyone in this group will acknowledge, STRS is a mess and as a result of that mess, all of us are suffering.  As individuals, we can't clean up the mess, but as a group of more than 30 thousand strong we have leverage.

I have said this many times and I will repeat it: The God awful mess at STRS is not our problem. Our problem is that we end up suffering the consequences as a result of a mess we didn't make.
If it's not our problem, who's problem is it?  First and foremost, the STRS Board and right behind the Board, Bill Neville and his administrative staff. They make the decisions and they determine the policy that has turned our lives upside down.  
For too long, the Board (under control of non-reformers) and Neville, have operated under the assumption that they can conduct business as usual while we suffer the consequences.
They hand out lavish raises and perks, they grant undeserved bonuses, they behave as though they are intitled to enjoy the best that life has to offer at our expense.
If we gain control of the Board, the metrics of success need to be redefined.  When we get nothing, they get nothing. Until the longterm promises made by STRS have been reestablished and addressed, there can be no business as usual for ANYONE.
The STRS hierarchy gets paid to solve problems.  They need to be held accountable.  If they can't get the job done they need to be replaced expeditiously by a reform minded Board that is, first and foremost, looking out for us.

Dean Dennis corrects misleading statements in a recent STRS publication, eUPDATE

Dean Dannis’ speech to the STRS Board

April 20, 2023
Dean Dennis, retiree from Cincinnati Public Schools, ORTA President Elect, Watchdog Administrator, Member of MOF, Member of 1520-R and Hamilton County Retirees Chapter. 
"There's been a lot shared about STRS Ohio lately on social media, the internet and email. Sadly, much of this information has been incomplete at best and incorrect at worst."  
This is how both editions of the  STRS eUPDATE "The Real Story" begin.  Perhaps these social media groups exists because of the way the STRS has been mismanaged the pension.
Let's look at the April 5, "Real Story" edition. 
"Fact 1," talks about the State Auditor’s report, skirting the fact that the Auditor also shared,
“You need to keep the promises to the people, who were made reliant based upon those promises. And, a lack of transparency, whether actual or perceived, has spawned the distrust, misunderstandings, and accusations that made the special audit necessary.”
In the second edition of "Real Story," released on April 12, "Facts 1 and 2" paint a rosy picture of how good active teachers have it under the STRS pension.
For example, the "Real Story" shares that the average STRS retiree receives an annual pension benefit of about $46,000, and receives 77% of the average of their highest five years. STRS compares this with the average OPERS Retiree receiving about $31,000 and then the average SERS Retiree, receiving about $18,000. I guess the STRS strategy was that if you tell members this information, members will forget about their 14% contribution rate, forget they must work 5 years longer, and forget there isn't a COLA in their future.   

Let's compare a teacher's retirement to an STRS staff member’s retirement; who pays into OPERS. The average STRS staff employee (comparing all 504 employees) currently earns over $137,000 (bonuses included for the investment department). So the average STRS staff member pension average well be around $107,000. Note they receive 78.5% for their 35 years, after an average of their highest three years. And yes, they also will receive a COLA. 
Board Members, is there going to be another Real Story before the election? Perhaps this is an executive session topic. For some reason this feels like election interference.
Lastly, where is the leadership at STRS? The problem has been obvious for years. STRS needs to find $4 billion a year in investments, because the employer contribution rate lags non-Social Security state peers by 10%. It's evident from the several billions STRS has clawed back from members. Your plan to invest your way out of the problem isn't working. Knowing that for years you needed more employer contributions forcing you to claw monies from members, one would think STRS leadership would be using their lobbyist to expose the problem and be shouting from the rooftops. Instead, crickets. Members demand change.  Scapegoating social media groups isn't the answer, members know who is the problem. 

Sue Brannan to STRS Board 4.20.23: Please provide a retirement plan that works for everyone!

From Sue Brannan

April 20, 2023
Ms. Correthers, Board Members, Actives, Retirees, Consultants, & STRS Associates,
My name is Sue Brannan, a retired public school classroom teacher. I retired with 30 years of service in 1995.
This IS a Watershed moment for STRS whose MISSION since 1920 has been to provide a Retirement System for Public School Educators.
As I said, I retired in 1995 with 30 years of service & received 62% of highest 3 years. 62%!
This is a “History of Benefits” Chart. The COLA is addressed at the bottom. There's information about the CPI, COLA bank . . . (I'd read it to you, but would go over the 3 minutes.)
62% has been OK as a base for retirement. I'm not here to complain. The COLA payout has been an irregular amount during the last 28 years of my retirement. The only consistent dollar payout was from 2002 through 2012. This seems strange because these years included both the Dot-com & 2008 Financial Crises.
FIRST POINT: 62% PLUS a COLA is Livable. When I retired, I had NO expectation of receiving a SALARY!
Today, at 30 years (for full-retirement) times 2.2 %, the payout would be 66%. But a COLA, consistent with inflation rates, would have to be part of the package.
So WHO would benefit most from retirement at 30 years of service? Many would be women who stayed home for several years, probably at least 5 years, to raise their own children. How ironic that their kids sit in our public school classrooms.
Thank You.
History of Benefits

Cathy Steinhauser to STRS Board: Be the fiduciaries you're supposed to be!

Cathy Steinhauser's speech to STRS Board

April 20, 2023

Thursday, April 20, 2023

Suzanne Laird to STRS Board: You should be outraged

Suzanne Laird's speech to the STRS Board April 20, 2023

Good Morning, Members of MY Board:

Month after month, year after year, we stakeholders have made the effort to attend these Board meetings. Some of the colleagues seated behind me have driven in from all over the state for 20 years. I, myself, have attended for more than 8 years, often speaking during public participation, to no avail. 

Rather than waste my valuable time writing another speech you will ignore, I turned to ChatGPT. Perhaps you've heard of it. 

For years, we've been begging you to act as fiduciaries for the educators of Ohio. Maybe you don't understand. One of the cool features of ChatGPT is that you can ask it to define terms on a second grade level.

"A fiduciary is a person who has been given a special job to take care of something very important for someone else."

And every time you ask ChatGPT, it spits out the same answer.

Kinda like the new social media guy, hired by STRS. On the Facebook page, he spits out the same answer, time after time.

He says Auditor Keith Faber did not find any fraud. ChapGPT says, "fraud is when someone lies or tricks another person to get something they want; or saying something that's not true to get people to do what you want."

Kinda like using teachers to make videos for STRS but never mentioning how much those teachers are losing every month by contributing 14 percent of their salaries or going without a COLA.

This Board should be outraged, not at me, for using second grade definitions to get my point across, but that another employee was hired while teachers are being asked to do more with less. Especially an employee who earns $200,000 for a job that could be accomplished by an AI bot.

You should be outraged that you cannot perform your fiduciary duties when you don't know all the fees.

You should be outraged that you were tricked into awarding all those raises and bonuses before they revealed the true amount of losses last year.

Quote: "A fiduciary is like being a really trustworthy helper who is responsible for making sure everything is safe."

Are you, my elected and appointed Board members, fiduciaries or AI bots?

Tuesday, April 18, 2023

Update from Robin Rayfield (April 2023 ORTA Newsletter)

April 18, 2023
From ORTA Newsletter

Spring is springing and I trust everyone is ready for some nice weather. ORTA has been active this winter advocating for our STRS members. Over last couple of months ORTA has presented information at local chapters, STRS meetings, meetings of the Ohio Board of Education, and the State Treasurer’s office.

ORTA Update

The Technology and Public Relations Committee met on March 21, 2023. The newly designed website was discussed and a few changes were suggested. The main concern is making sure ORTA’s information is consistent and accurate. To that end ORTA welcomes any information that might help us to accomplish the task of providing accurate and consistent information.


Additionally, ORTA member Cindy Murphy has stepped forward to assist any chapters that want to update their website. This could be a brand new website or simply updating an existing website.


Cindy will be offering online training for chapters that would like to build a website with the new Google Sites. Google Sites is free and easy to use.


Cindy is a Certified Google Educator. She has taught Google Sites at Portland Community College in Portland, OR, and helped friends and colleagues build their own websites with Google Sites.


Contact if you would like to attend one of the workshops or if you have questions.



The Legislative Committee also met last month to discuss several pending legislative measures. Listed below are the notes and positions from our committee meeting:


Backpack Bill House Bill 11
This bill would provide universal vouchers to all students in Ohio. In essence, this bill would provide between $6500 and $7500 to each school aged child in Ohio to attend any school in Ohio, public, private, or home school. At a cost of over $1 billion this legislation would significantly undercut the public schools in Ohio. As you may recall, the vouchers program began in Cleveland several years ago costing around $42 million. This year the vouchers programs in Ohio cost about $350 million. With the proposed legislation in SB 5 this would triple to over $1 billion. There are several reasons ORTA opposes this legislation:

  1. Every dollar that goes towards funding private educational organizations is a dollar that is not sent to our constitutionally mandated system of public schools. With our schools struggling to accomplish the monumental task of educating Ohio’s children, any diversion of resources designated for education is unthinkable.

  2. Since 2000 approximately $25 billion has been directed to private schools undermining support for public schools.

  3. Originally, the voucher program was developed to assist impoverished students in pursuit of a private education. Currently, the majority of the money is directed to families that have already decided to send children to private schools in the form of a rebate for costs paid to private schools.

  4. SB 11 would open the doors to home schooled parents to receive vouchers to educate their children at home.

  5. This legislation is the biggest threat to the common public school and will devastate the public school as we know it.

  6. As STRS retirees, SB 11 will have a negative impact on our pension system. By incentivizing parents to choose private schools over public schools fewer educators are needed as student enrollment in public schools dwindles. Fewer educators paying in to the STRS system means less contributions into the STRS system.


Accordingly, ORTA is strongly opposed to HB 11.


SB 1

This bill has already passed the senate and is being worked on in the Ohio House. This bill would strip the State Board of Education of its power to regulate public schools in Ohio and place the control of our public schools in the hands of the governor. This would reverse a constitutional amendment voted on by the people of Ohio. In recent meetings of the Ohio State Board of Education, legal challenges to SB 1 were discussed. It may well be that this bill is on a fast track to passage, however ORTA is opposed to such a power grab by the executive branch of our state government. This bill is known as House bill 12 in the house. Both versions move the department of education into the governor’s control.


HB 1

This bill would reduce the ‘assessment level’ on property tax from the current 35% level down to 31.5%. The net effect of HB 1 would be that property owners would pay less in taxes each year. This bill also would change the rates Ohio citizens would pay on income. Interesting to note is that projections from Ohio Policy Matters indicate that most of the reductions in taxes would go to the very wealthy.  Perhaps this is a good thing, however, schools (and other municipalities) would receive less revenue. This would force more and more schools to seek tax increases to maintain current levels of funding. ORTA’s Legislative Committee did not take a firm stand on this issue, however, we do believe that all citizens should be aware of this legislation.


HB 78

House Bill 78 concerns STRS elections. Currently the STRS board has 7 elected seats and 4 appointed seats. Of the elected seats, 5 are seats held by ‘active contributing members’ and 2 elected seats are held by ‘retirees’. With a split of 49% retirees and 51% active members, ORTA has lobbied for a more representative board at STRS. ORTA has requested that 1 of the active seats become a retiree seat. What is worse, is that currently people that retired from teaching and were re-employed in an educator’s role were unable to run for ANY seat on the STRS board. HB 78 is a compromise piece of legislation that allows a retiree/rehire person to run for either a retiree or an active seat on the STRS board. STRS management opposes this legislation and has attempted to amend the legislation to allow retired/rehired people to ONLY run for a retiree seat. ORTA supports the bill in its current form which would allow retirees to have a CHANCE at having more representation on the STRS board. This bill has been introduced but has not had any hearing to date.


Finally, ORTA has ‘heard through the legislative grapevine’ that the Fair School Funding Bill (Cupp-Patterson) is included in Ohio’s budget. As I understand this bill, the phase 1 portion is included in Ohio’s budget. Of course, nothing is guaranteed, but this looks promising for the schools in Ohio. ORTA is supportive of the Fair School Funding Bill


So, the question becomes, ‘What do we do with this information’?

ORTA has a history of influence with state level politicians. We ask that each chapter leader forward this to the legislative committee of your local RTA. We further ask that each chapter reach out to their local state representative and Senator to let our voices be heard. A simple phone call or email to your local elected officials is extremely effective. Listed below is a step by step process to have a significant impact.


  1. Determine who your local state officials are. You can find your representative or senator here:

  2. Write or call your elected official and voice your opinion on the legislative proposals.

  3. Remember, it is far more effective if multiple people make contact with an elected official one time than if 1 person makes contact several times.

  4. Ask about any town halls, or regular office hours your elected official has in your area. Attend one of these opportunities and voice your concerns.

  5. Another place to locate your elected official using your address is here:


STRS Election

A reminder that ORTA has joined with STRS Members Only Facebook Group, STRS Watchdogs, and the OFT in endorsing Pat Davidson for the active seat on the STRS Board of Trustees. Although retirees are not allowed to vote on ‘active member seats’ ORTA encourages all retirees to talk with their active member friends and encourage them to support Pat Davidson for this seat. The reform minded board members are 1 seat away from a majority. Mr. Davidson could prove to swing STRS in the right direction.


- Dr. Robin Rayfield

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