Friday, June 23, 2023

Feds seek prison time for former Ohio House Speaker Larry Householder 

Federal prosecutors seek 16-20 year sentence for former Ohio House Speaker Larry Householder
The Statehouse News Bureau 
By Jo Ingles
June 23, 2023 
Federal prosecutors are recommending former Ohio House Speaker Larry Householder be
sentenced to 16-20 years in prison when he appears in a federal court next week.
In documents filed with the U.S. District Court where Householder was convicted of bribery and racketeering in a $61 billion energy scandal, federal prosecutors argued the lengthy sentence is consistent with sentences imposed for similar crimes, and "will communicate to the public that the rule of law applies to everyone, including prominent public officials."
"Householder was the mastermind and leader of a criminal enterprise responsible for one of the largest public corruption conspiracies in Ohio history. The scope of the conspiracy was unprecedented – approximately $60 million over a three-year period," the memo states. "So was the damage it left in its wake, both in terms of its potential financial harm to Ohioans and its erosion of public trust."
Read the rest of the article here

Wednesday, June 21, 2023

Dan MacDonald to STRS Board: Do you know the STRS plan for restoration of benefits for actives or retirees?

From Dan MacDonald

Remarks to the STRS Board
June 15, 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 279R, North East Ohio AFT retirees. 
I would like to thank the Chief Benefits Officer and her staff member for her presentation at our local’s June Scholarship Luncheon. It was refreshing to hear a person’s biography and then throwing the floor open to questions and concerns to 140 retirees. No slides, no handouts, just what is on your mind. Very good listening skills were employed. The questions and concerns were clarified and acknowledged. 
Do not worry, no promises were made other than the concerns would be brought back to the senior administrative staff.  STRS was well represented and received. I will say that the coming January 1st switch-over to CVS from Express Scripts is a major nervous point with past transition problems remembered along with concerns on changing costs, delivery, specialty drugs, predeterminations and just getting lost.
On to FY 2024 Budget. Liabilities, expenses, were added last month. STRS senior staff were silent on STRS Board Policy, under Funding, which states that “At 85% or greater, the Board may consider changes that in the determination of the Board’s actuary do not materially impair the fiscal integrity of the system.” 
Why am I bringing this up? Previous Boards have created the Funding policy and the scorecard/dashboard as a visual for the Funding policy. This Board, less one, asked Cheiron to create fiscal integrity tests. They did. Budget failed restorations. 
Bottom line, is there really any STRS plan to restore COLA and restore active benefits in the long or short term? Actives have made it clear they want to get back to 30 years for full retirement. My view currently is that no plan exists since it cannot be articulated by STRS senior staff, Board members, or Board policy.
New Board member [names are not to be used in Public Participation, a Board Policy that should also be changed], you are in real estate. Please use your talent to review the properties held by the investment department. I have read articles that would suggest STRS’s holding might not be as desirable as they have in the past.
Finally, the 2024 PBI policy dates should be altered to determinations made after the fiscal year has ended and the books are totally closed. I suggest, as a Benchmark, using the general funds rate of return goal of 7% for each entity, or, somehow, the Board’s determined ROR, be calculated in benchmarks.
As always, actives need enhanced benefits and retirees need their 3% COLAs restored. 

Dan MacDonald's report on the STRS ad hoc governance committee meeting on June 14 and the STRS Board meeting June 15

From Dan MacDonald

Dan MacDonald attended STRS’s ad hoc governance committee meeting on Wednesday, June 14th.  Four companies were interviewed to assist the Board in reviewing, altering, rewriting, or writing STRS’s governance policies along with having the Board look at its split through governance. [Interesting, the next day Fichtenbaum moved to have approved Robert’s Rules of Order. His motion was tabled. On this day’s presentations, what impressed me most were lawyers’ fees, the most impressive, an hourly rate of $1,725, discounted for STRS to $1,380 an hour.  All 4 firms were not located in Ohio so think of travel fees.]  No decisions were made.  Two more companies still need to be interviewed.
Rob Walters and I attended the Board meeting on June 15th.  [Thanks to all who tuned in. There was quite the large, raucous crowd present.]  The meeting started at 8:30 am and adjourned about 5:45 pm. After May minutes were approved, Chair Correthers called for the Investment Department Report. Sellers interjected a motion to go into executive session because of the legality of the meeting and the lawsuit filed by Wade Steen. The vote was 6 to 4 with Herrington missing the vote [Actions speak louder than words].
The Investment Department continued.  The Semi-annual Broker Evaluation and Associated Policies and the Amended Stock Proxy Voting Policy were moved and approved. The FY 2024 Investment Plan and an Economics report was made featuring data slides on interest rates, inflation, capital expenditures, the housing market, the labor market, the job market, consumer spending, and recession risks.  Questions throughout. Then each department reviewed FY 2023: Fixed Income, Domestic Equities, International Equities, Real Estate, Alternative Investments, and Risk Management. As FY 2023 ends June 30th, the investment staff is forecasting below trend economic growth and projecting a positive fund return at-to-below the board’s policy return of 6.03%.
Outside consultants Callan and Cliffwater both approved the FY 2024 Investment Plan. The Investment Plan was moved and passed with 7 Yeas and 4 Abstains: Fichtenbaum, Foreman, Jones, Sellers. [Actions speak louder than words.] Consultant Callan then compared STRS with other pension plans and showed data that STRS was bettering most and the fund had a gross return over 30 years of 8.86 percent. Fichtenbaum and Sellers both pushed Callan on their data and STRS successes. 
Finally, Callan stated that STRS will not be able to invest out of STRS’s continued $4 billion hole; other funding is needed. Throughout the meeting, Dr. Hunt suggested establishing a legislative committee to address funding. Correthers stated a need for all stakeholders to work together. Bottom line, no Board member made a motion for another committee. [Actions speak louder than words.]
As to the General Fund, May’s preliminary return was a negative 0.59%.  FY 2023 return is estimated at a positive 4.67% gross; positive 4.56% net.  Total investment assets ended May at $87.8 billion, higher by $200 million in fiscal 2023. [Remember, last month the Board voted a one percent COLA starting July 1, 2023 and kept actives at full-retirement with 34 years of service until 2028. There changes added $825 million to future costs. I hope you are catching that since Jul 1, 2022, the fund is up $200 million but the Board added costs of $325 million. With this type of accounting, what is the plan to restore active benefits and restore a 3% COLA? There is NO WORKING PLAN. Actions speak louder than words.]
Public Participation followed. 13 people spoke. 12 retirees and 1 active. 2 spoke in favor of the Board’s actions, 11 expressed multiple concerns regarding the Board’s action.
The Board then went into Executive Session for over three hours, returning at 4:03 pm.  Outside consultant AON reviewed the Performance-Based Incentive (PBI) Policy. Consultant AON suggested several language changes to the policy. During discussions Board members admitted to confusion and lack of clarity. Both Bishop and Falls addressed inclusiveness. All stakeholders, including STRS should be treated with fairness, but pain needs to be acknowledged throughout the organization in its working policies and decisions. The PBI policy for FY 2024 was not brought up for vote. Further discussion should take place in August.
The Finance Department started its report at 4:47 pm. The proposed FY2024 Budgets, Operating and Capital, were presented. Lots of discussion and before voting Falls, Fichtenbaum and Bishop gave brief speeches.  No Board member made a motion to amend any part of either budget.  A two percent merit-based raise was approved for staff.  [Remember that investment incentives are based on salary; remember fairness and pain, where is it? Actions speak louder than words.].  The Budget was approved 6 to 5 with Bishop joining Fichtenbaum, Foreman, Jones, and Sellers as a “Nay”.
Executive Director Neville reported on 6 areas and had STRS Lobbyist Bump report on Ohio Assembly bills dealing with STRS concerns.
After Routine matters, an election was held for a new vice-chair for September, 2023.  Price is currently vice-chair, but in September, he becomes chair. Next year’s vice-chair becomes chair in September, 2024. Fichtenbaum and Correthers were nominated.  Correthers was voted to be vice-chair.  [Bishop and Falls talked more than once about needed changes; another spot that change could have been activated was in this vote. Actions do speak louder than words.]  Vote 7 for Correthers; Fichtenbaum 4.
The meeting ended with Fichtenbaum moving that Board meetings follow Robert’s Rules of Order. By a 7 to 4 vote the motion was tabled. [Actions speak louder than words.] 
No meeting in July. The next Board meeting should be August 17, 2023.

Monday, June 19, 2023

Julie Fredicksen showcases the enormity of that 27th check to the STRS Board in terms they can't miss

From Julie Fredericksen

STRS Speech June 15, 2023

Sunday, June 18, 2023

How private equity firms are widening the income gap in the U.S.  

A must-read article about private equity firms. STRS is discussed towards the end, but we are all affected in other ways and don't even know it. PBS's Fresh Air host Terry Gross interviews Gretchen Morgenson, Pulitzer Prize winner and author of a new book These Are the Plunderers: How Private Equity Runs - And Wrecks - America.
Read it here, or listen to the podcast. 

James Carr: The STRS heirarchy isn't looking out for our best interests. Like a pack of hungry hyenas, they are opportunistic predators, always looking for their next meal. Unfortunately, we are the main course on their menu.

From James Carr

June 18, 2023
When I read Denny Jordan's post referring to the pie (STRS refuses to share as we continue to get smaller slices), it made me think. How does STRS effectively get away with what is essentially theft?
Then it hit me; the STRS heirarchy has a predatory mindset. Instead of being loyal guard dogs who faithfully protect the herd from harm, they are a pack of hyenas looking for any opportunity to to find their next "meal".
They believe that it's OK to steal from us as long as the State of Ohio gives them opportunity. The state gave them permission to "adjust" our COLA. They adjusted the COLA to 0%. The state gave them permission to raise member contributions from 10 up to a maximun of 14%. Actives now pay 14%. Does anyone doubt if the state allowed STRS to make cuts to our monthly benifits that they would not hesitate to do it?
The STRS  heirarchy isn't looking out for our best interests. Like a pack of hungry hyenas, they are opportunistic predators, always looking for their next meal. Unfortunately, we are the main course on their menu.  
We need to replace the hyenas with genuine guard dogs who are faithful to us.  Unfortunately, we can't do that without a reform-dominated Board. We are close. Very, very close.
Larry KehresMount Union Collge
Division III
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