Editorial comments from Joe Lupo, founder and administrator of FB group Ohio STRS Member Only Forum ("MOF"): some timely words of advice for the STRS board
From Joe Lupo
April 16, 2025
"The board needs to exercise their governing power and put raises and benefit increases on hold until they hire a new executive director."
THE BOARD NEEDS TO SAY NO TO STAFF SALARY & BENEFIT DEMANDS!
The current issues of a staff salary increase of 8.8% and 10.5 benefit hike needless to say has raised some serious ire from MOF members... and rightfully so. Members once again have displayed their feelings of displeasure as they did in a previous survey conducted prior to the board once again rewarding the investment staff with bonuses. It seems that the board is all in when it comes to addressing staff needs and all out when it comes to meeting members' needs and concerns. The board continues to fail miserably in their responsibility as fiduciaries for the members they represent, both retirees and actives alike. And I will predict the board will crumble again under pressure and approve staff raises and benefit increases. I hope I am wrong, but past performance indicates otherwise.
It is my understanding that it has been a past practice for staff to determine their annual salary increase much like the investment staff determines the formulas and numbers for their outrageous bonuses. STRS operates like no other organization I know and this is just another glaring example of the tail wagging the dog.
The board needs to exercise their governing power and put raises and benefit increases on hold until they hire a new executive director. Accepting such a recommendation from an interim director who will not be around to deal with the consequences is no less than misfeasance by the board. For them to continue the spending spree they are engaged in without input from a new executive director is the height of irresponsibility on their part and clearly a matter of the blind leading the blind and adding more destruction to an already broken retirement system.
The board continues to engage in their spending spree ALL at the members expense. Wasting our pension funds on staff travel, out of state real estate offices, a failure to reduce staff, staff raises, a very questionable annual outrageous bonus system for investment staff, inflated employee perks, a lavish underutilized building and parking deck, a subsidized cafeteria and staff workout center, and over-staffing are just a few of the areas that the board has failed to address during their current tenure. In fact, they have failed to question or address these issue in an open meeting which triggers another concern regarding their lack of transparency. They hold way too many executive sessions.
To state that I am very disappointed with the board would be a understatement. They have failed to walk the talk they promoted during their respective campaigns. Members deserve better! Unfortunately, I believe that we are asking for more than they can deliver based on what we have witnessed to date.
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From Joe Lupo
April 17, 2025
"Without the implementation of true reform by the board addressing spending and revenue issues, we will continue to be led down a financial path that ends with a cliff."
BUYER BEWARE... ALL THAT GLITTERS IS NOT GOLD!
I was always taught to be thankful for small things. The reduction of years of service to 32 years for actives and a one time 1.5% COLA for retirees fall into this category. However, this falls far short of the amount of loss incurred by STRS victimizing members financially to make up for years of mismanagement of a once premier retirement system. As we celebrate these changes, please understand that these are really only short term gains.
The downside to the reduction in years of service for actives and a one time 1.5% COLA for actives will exacerbate the long term problem of financial stability even more. STRS has a daily negative cash flow meaning they are spending more money than revenues coming in. The board has done absolutely nothing in terms of reform by addressing a reduction in spending and increasing revenues. This means that the net worth of our retirement fund continues to be reduced in order to make up for the shortfall of revenues to meet expenses. Additionally, an approximate 20 billion dollars of unfunded liabilities remains on the books not including current and future staff salary increases as well as outrageous bonuses that will continue to erode the financial stability of our pension fund and impact the annual actuarial. Lastly we have no idea of what losses will be incurred with the sale of real estate currently owned by STRS.
There is also the question of the current level of benefits for current and future retirees being reduced in the future? Understand, I am not worried about myself. I will be 80 years old in June and it is very likely I will survive the "Mess at STRS." However, I am very concerned about our younger retirees and actives, and all those who will be working in public education in Ohio in the future... that is if there is even a future for public education in Ohio. There are a multitude of issues at the state level being discussed and if passed will further add to the mess.
Without the implementation of true reform by the board addressing spending and revenue issues, we will continue to be led down a financial path that ends with a cliff. It is imperative that the board hire an outside executive director with the ability and experience to make the necessary changes at STRS so the dog once again is wagging its tail at STRS, and the board is back in charge and not the staff.
Our pension fund has been mismanaged for years and the billions of dollars spent are gone forever. As expenses continue to exceed revenues, the net worth of STRS will continue to be reduced. The STRS well of money like all wells does have a bottom. We all know what happens when a well goes dry.
posted by Kathie Bracy at 2:06 PM
