My letter to a retired STRS stakeholder: my overview of the situation at STRS

September 1, 2023

Hi (xxxxx) --

I'm happy to hear from (xxxxx) of your interest in returning Wade Steen to his rightful place on the STRS Board. Wade has been a very strong advocate for retired and active teachers, and his removal from the Board has been very upsetting. Judging from the way his dismissal was handled, it is obvious it was a political stunt to keep reform-minded individuals off the STRS Board. We were getting too close, in the eyes of our adversaries, to gaining a majority on the Board in order to bring about badly needed reform. Some of us have been fighting for this for decades. 

Who are our adversaries? Many politicians, clear up to the governor. We have had no help from the ORSC (Ohio Retirement Study Council, made up of legislators); by law they are supposed to audit STRS every ten years, but it took sixteen years and pressure from teachers to finally bring it about; also the House Pensions Committee, which is a fairly new group, but so far has done nothing to help us. The chairman of that committee, Bob Young, was just this week removed from that position after being arrested twice since July for charges stemming from domestic violence, assault and violation of a protection order. He is not in jail, but is required to wear an "ankle bracelet" (a GPS monitor) at all times. He is also facing possible expulsion from the Ohio House of Representatives, which would be only the second such expulsion in 150 years, the first being Larry Householder's expulsion (former Speaker of the Ohio House of Representatives). https://www.news5cleveland.com/news/politics/ohio-politics/ohio-rep-bob-young-removed-from-leadership-role-after-second-arrest 

Another major adversary has been OEA (yes, OEA!) which, for many years, has dominated the STRS Board and contributed to its corruption until our Facebook group, Ohio STRS Member Only Forum ("MOF" for short) came along. The group was founded in 2017 and is dedicated to restoring our COLA and reforming our pension system. Its membership currently numbers over 35,000 active and retired teachers. It has only been in the last few Board elections that we have had the ability, with our numbers, to gradually replace the OEA members of the STRS Board with reform-minded active and retired teachers.

In last spring's election we unseated three incumbents, all OEA "clones", replacing them with individuals dedicated to ending the corruption that is rampant at STRS. We still have two more to unseat, which will take the next two elections to accomplish, when their four year terms end and they are up for reelection. With the seating (official today, 09/01/2023) of our newest elected reform-minded Board member, Pat (Patrick) Davidson, and the anticipated return of Wade Steen to his seat on the Board, we will finally have a majority of six votes on the STRS Board.

I'm glad you contacted the governor about restoring Wade Steen to his rightful seat on the STRS Board, though I doubt if you will get very far with that effort since Governor DeWine is not our friend since he replaced Wade with a non-reform Board member, Brent Bishop. If you wish to help Wade in his lawsuit to regain his seat, you can do it through ORTA (Ohio Retirement for Teachers Assn., formerly Ohio Retired Teachers Assn.), whose executive director, Robin Rayfield (a retired teacher himself) is a bulldog of an advocate for all teachers, retired and active. ORTA has started a Defense Fund that will help Wade with his legal expenses. Go to this page on ORTA's website: https://www.orta.org/defense-fund if you would like to contribute to the fund.

If you are a member of Facebook, you can join MOF, and we would certainly welcome you. Go to https://www.facebook.com/groups/OhioSTRSMemberOnlyForum/. You can find a lot of information on that site that will enlighten you to a lot that has been going on at STRS for many years. You can also find a lot of information on my blog (https://kathiebracy.blogspot.com/), which I started 18 years ago as a virtual repository of STRS history clear back to 2003, when the STRS Board unceremoniously dropped spousal subsidy for group healthcare, suddenly making the lives of thousands of retirees extremely difficult because of the high cost of private health insurance for their spouses. 

If you are not a member of Facebook, there is another group you can join, STRS Ohio Watchdogs  {https://www.facebook.com/groups/485740805463320). It is a public group that anyone can join. If you are not a member of ORTA, I would strongly encourage you to consider joining that group, too, as ORTA is the only group, other than MOF, that strongly advocates for all teachers, retired and active.

 As a retired member of STRS, you are no doubt experiencing the difficult effects of inflation due to the loss of our COLA in 2017, which is drastically affecting our buying power, especially that of those who retired many years ago on very low pensions. This has been the topic of many speeches made by teachers at the monthly STRS Board meetings, but largely falling on the deaf ears of the non-reform-minded Board members and the entire senior staff of STRS. If you haven't been aware of the highly inflated salaries and bonuses handed out to them (your money), you will soon learn as you investigate what has been going on all these years at the pension system we so blindly trusted with our money, and which many teachers still do, since the only "information" they receive is what STRS and OEA put out. 

I would encourage you to attend STRS Board meetings, if you can, to see what's going on. Most Board meetings occur on the third Thursday of the month (except July and January; I just checked their calendar, and it looks like they have now dropped November!). https://www.strsoh.org/aboutus/board/calendar.html STRS is working very hard to refute our findings, to the point of hiring a second communications officer within the past year, at a salary of $195,000 (our money, of course). STRS has a greatly inflated staff of over 500 employees, compared with the much smaller staffs of other pension systems around the country; plus a huge, palatial, central office on Broad Street in Columbus ("the Taj" to us), costing us millions every year in maintenance costs. All of this is only the tip of an iceberg that has been steadily growing for many years, and of which thousands of teachers are still unaware because of our inability to reach all of them. 

Thank you for your interest in what's going on at our illustrious "Cadillac of Pension Systems" (their words for many years). I hope you will become involved as we continue our steadily growing quest to bring badly needed reform to STRS. We will get there eventually; it's only a matter of time.

Kathie Bracy

How DARE those pesky Board members even THINK of questioning His Holiness!

From John Curry

September 1, 2023

Want to see Bill Neville clam up and not answer a Board member's question? Here you go......

YOUTUBE

Director Bill Neville & Counsel Stacey Wideman stonewall Board members' questions on Steen removal

ORTA's Executive Director, Robin Rayfield, nails it on the STRS bonus setup with just three words: "What a scam!" (Bill Neville, are you listening?)

From Robin Rayfield 

August 28, 2023

Update to ORTA members on the August 17, 2023 STRS Board meeting

STRS Meeting Takeaways

Greetings ORTA Faithful!

As you already know, the STRS board met last week (August 17th). I thought it would be important to offer my takeaways from the meeting on August 17, 2023.

STRS made PBI (bonus) payments to staff AGAIN. This year the bonus payments total $8.5 million. What is so problematic with these payments is that STRS investment staff failed to meet the benchmark for earning these bonuses. At the risk of getting too technical, STRS stated that their total return for the 2023 fiscal year was 7.68%. This return number, however, is a gross number and does not include the fees, costs, and expenses for the largest part of our portfolio. STRS staff claim that this gross number exceeds the total fund benchmark of 7.62%. However, the NET return for 2023 was 7.55%. 7.55% is LESS than the benchmark of 7.62%. This information (provided by STRS) states very clearly that our investment staff did not meet the benchmark.

2. It is abundantly clear that the STRS board has four members that see the need for reform. Fichtenbaum, Sellers, Foreman, and Jones voted against paying the bonuses. The other seven members did not vote against the payments despite Dr. Fichtenbaum’s comments that the performance of the investment staff did not meet the benchmark net of fees and costs. In fact, Dr. Hunt (appointed by the superintendent of schools in Ohio, i.e., Gov DeWine), Mr. Price (active STRS member), and Mr. Bishop (appointed by Gov. DeWine) all took time to speak about the greatness of the investment staff. Appointed members Herrington, Lanza-Falls, and elected members Correthers, and Lard all voted for paying bonuses despite not beating the benchmark net of costs.

3. The current makeup of the board (as of September 2023) will have five reform minded members and six members that ignore facts and simply go along with whatever STRS staff recommend. Remember that DeWine’s firing of Wade Steen and replacement by a pro-STRS staff board member Bishop is being challenged in court by Mr. Steen. ORTA has established the Pension Defense Fund to support STRS members’ interests. Mr. Bishop was clearly appointed to keep a majority of board members on the side of paying bonuses that are unearned and maintaining the status quo on the retirement board.

4. The STRS board is clearly divided between two groups. The current majority of members support whatever STRS executive director Neville recommends. These people know it is not acceptable to pay bonus on numbers that are ‘gross of fees and costs.’ The other group are reform minded people and challenge STRS leadership when necessary.

5. The PBI policy was amended at the September 2023 meeting, but not in a meaningful way. The board adopted staff-suggested changes to the PBI policy that will ensure that the bonus train will continue for investment staff through 2024. Once interesting fact is that this marks 35 years of the PBI program - no person could recall a time when STRS investment staff have not received bonus payments. I guess when you set your own benchmark, it is quite likely that you will beat that benchmark. And just in case the staff do not meet the benchmark (such as the most recent year), the PBI program protects staff bonuses by using gross returns to overstate their asset class performance. Remember, when gross numbers are used, the membership is paying a bonus on money the teachers will never see. If we made 10% but paid 3% in expenses, our net return is only 7%. STRS is paying bonuses on the “gross” return. We should only pay bonuses on the net return that the pension fund receives. What a scam!

6. Other notable events were a five-hour executive session that produced no obvious board action and public complaints concerning the pending closure of STRS daycare. The board briefly discussed Neville’s mismanagement of the in-house daycare center and his mishandling of its pending closure. This program has provided day care and preschool for STRS employees and public participants for decades.

The daycare had long been subsidized by teachers (lost money, especially during Neville’s tenure) and was a source of concern for many STRS members. Despite passionate testimony from parents who used the childcare services, Neville explained that he couldn’t find a way for it to be profitable, so he decided to shut it down without any input from the Board.

Lastly, the board did not provide Neville with the outrageous annual raise to which he is accustomed, which is usually done in the June board meeting. Maybe Neville has something special in store for himself in September.

Despite the challenges we face to achieve reforms at STRS, we are having an impact. If Wade Steen is successful in his legal challenge to DeWine’s political stunt to remove him from the STRS board and replace him with Bishop, people who want to see reform at STRS will have a majority. Perhaps at that point the corruption will come to an end.

_________

Donate to the ORTA

Defense Fund

Ohio Retirement for Teachers Association

250 E Wilson Bridge Rd, Worthington, OH 43085

614.431.7002 

Visit ORTA.org  

James Carr: An urgent need to clean house in Columbus

From James Carr

August 30, 2023

Facebook (MOF)

There are somewhere in the neighborhood of 500,000 teachers in Ohio, active and retired. That's enough people to make a real impact in a state-wide election.

Our retirement system is governed by the Ohio General Assembly, and looking at the quality of our state representatives, it's little wonder that STRS is in such distress.

We have the former Speaker of the Ohio House, recently convicted of bribery, serving a 20 year sentence in a federal penitentiary. We have a ranking Ohio House officer who is the Chairman of our Retirement Committee, charged with a recent episode of domestic violence, and he's now under arrest for disobeying a restraining order. We have a Governor who illegally fired the only appointed member of the STRS Board who was working on behalf of reform.

These people can't even govern their own conduct, should we be surprised that they've played a crucial role in corrupting our retirement system?

Before the next General Election in November of 2024, we seriously need to consider the urgent need to clean house in Columbus. The incumbents need to go, they are a blight on the State of Ohio.

 

Trina Kay Prufer: Best Practices - STRS created a defined-benefit retirement system that left Ohio’s retired teachers in the worst financial situation possible.

From Trina Kay Prufer

August 30, 2023

https://www.gfoa.org/materials/preparing-an-effective-summary-plan-description?fbclid=IwAR0C3-gKm0WEfjpad2_0DW1L_gO-QC_bZmaa7F3wSyiNEXfAzPNv4sXu1jA

Best Practices - STRS created a defined-benefit retirement system that left Ohio’s retired teachers in the worst financial situation possible. 

We were lulled into believing we had financial security in the form of inflation protection, only to be told it was all a mirage. The reality is that 20 years without a cola leaves retirees with a benefit worth less than half its original buying power. Because we are not eligible for Social Security, there is no safety net whatsoever, for the aged, disabled, survivors and even those with supplemental assets are left not knowing how to plan for the future. Ohio’s retired teachers never had a chance to prepare for a financially secure retirement.

If, as STRS claims, the cola was NEVER meant to be an integral part of the benefit, we should have been informed of this risk, as it altered our security, safety and ability to provide for basic needs.

If all pensions systems followed the example of STRS, it would destroy the defined-benefit as a viable option for retirement planning.

Best Practices are the guard rails of what every government employee should expect from their retirement system. It’s the glue that holds the system together. It’s a common set of expectations, rules and ethical practices. You be the judge of how STRS measures up.

STRS Board member Julie Sellers is tired of putting up with Bill Neville's garbage -- and with good reason!

Franklin County Ohio Court of Appeals

Clerk of Courts

Date: August 30, 2023

A timely quote from Julie Sellers, contributing STRS Board member since 2022

 

Trina Prufer: AN INCONVENIENT TRUTH

From Trina Prufer

August 29, 2023

AN INCONVENIENT TRUTH

It‘s un-American to leave Ohio’s teachers without INFLATION PROTECTION, either through Social Security, or STRS, after they were promised a secure retirement (3% cola annually, in writing) throughout their working years. It’s the ultimate double-cross… it’s elder abuse, theft, and criminality of the worst kind.

We are the only teacher retirement system in the nation, EVER, to assure teachers, in a non-Social Security state, of a pre-funded Cost of Living Adjustment, and then declare that the PLAIN WORDS and calculations in our retirement contracts, the ORC and plan booklets WERE NOT true.

The foundation of our society, through Social Security, is to keep older Americans out of poverty, by providing a basic benefit with INFLATION PROTECTION. So why are Ohio’s teachers left out?

This is a crisis that gets worse every month. It will never go away. It will haunt STRS forever.

I realize I am being redundant… however our legislators need to be reminded of this inconvenient truth at every opportunity.

One person's viewpoint of our "illustrious" pension system

From James Carr

August 29, 2023

Facebook (MOF)

Ask yourself, in what world does a legitimate organization induce you to retire with the promise that you will receive an annual 3% COLA for the remainder of your life, and then, AFTER you retire, renege on that promise without warning?

The answer is, no legitimate, ethical organization does that. The kind of organization that pulls that kind of a low-down stunt is a fraudulent, criminal enterprise. Now, STRS can call itself anything it wants, but actions speak louder than words. When I think of STRS, l don't think of a premier retirement system. In fact, I think of organizations like Enron and people like Bernie Madoff. STRS makes me feel like I've been conned by a bunch of shady grifters.

Trina Kay Prufer: We are being cheated because STRS assumes teachers are ignorant and still live in a paternalistic world.

From Trina Kay Prufer

August 27, 2023

Why STRS is able to cheat us - In 1973, despite having a full-time job, I was unable to get a credit card and would not have been able to purchase a home in my own name. In short, the world I grew up in was paternalistic, as it assumed that men were the breadwinners and women needed someone to take care of them.

Despite it being 2023, STRS still operates on the premise that teachers, mostly women, know very little about finance. The STRS big secret is that 30-40 years of retirement contributions, invested in the market, should produce an amount equal to 7-10 times its original worth. This is possible because of the power of compounding on investments over very long periods of time. This amount is hidden from us, denied, never mentioned. As we are not paid all at once, our lifetime contributions continue to earn money for STRS.

STRS still functions as if we are in that paternalistic, simplistic, seemingly safe world of the 1970s. Back then, teachers were led to believe STRS would provide "financial security" in retirement and were lulled into a false sense of complacency. What happened is that Wall Street, politicians and STRS figured out that teachers' savings could be a cash cow, and every trick in the book was used to separate us from our money. Examples from the STRS playbook include: "the cola is an enhancement” , “you will get back what you paid in” ”the cola was never guaranteed” and “STRS is a premiere retirement system”. All of these statements assume we are stupid... just watch the videos STRS puts out.

The amounts we contributed during our working years were guaranteed to include inflation protection, as long as we put in the 30-35 years, which was fair and reasonable. It still is. Increasing the contribution rate to 14%, putting all the employer contributions towards the unfunded liability, spending outrageous amounts on employee perks and bonuses, having actives work 4 more years, removing the cola after teachers had already retired… that’s theft on a grand scale. It’s 2023; teachers understand the grift. The loss to membership is so great, it's criminal.

The current system should be illegal. There is nowhere else in the financial world where a contract is only binding on one side. We are being cheated because STRS assumes teachers are ignorant and still live in a paternalistic world. They get away with it because the state legislature is willfully blind, complicit and profits from our loss. It will end, either when the upcoming litigation is decided in our favor, or the next generation refuses to be duped.