Dan MacDonald's report on the August 2026 STRS board meeting

From Dan MacDonald

August 23, 2026

FISCAL YEAR ENDS 

August’s STRS Board meeting was a Monday and Tuesday, August 17/18, 2026. It opened with the Investment Committee. June closed the 2026 Fiscal Year [FY]. The net return for June was a positive 0.2%. The total net fund return for the FY was a positive 14.2%. Total investment assets ended June about $110.2 billion, higher by $9.5 billion in FY 2026. Total fund benchmark return was a positive 14.6%. Total fund net return annualized for the past five years was a positive 7.6%. [Note that there is still a $4 billion cash flow concern with actives and employees’ contributions into STRS and benefit payments out from STRS.] A slide pointed out that the Investment Department ‘s aggregate investment net value added over 5 years was $868,138,381 while the aggregate Performance Based Incentive [PBI] was $40,448,435. Ratio to PBI : 21 x. Outside consultants Callan and Meketa then basically praised the department on their excellent quarterly returns with comments like we are “living currently in a streak we may never see again,” ‘Super, super year.” Multiple charts were presented for quarter, year, 3 years, 5 years, and 10 years. The meeting concluded with a review of security compliance policies and procedures.  

The Governance Committee then met. Much time was spent determining the definition of risk for the policy booklet. Consensus was reached on a definition. Following, Executive Director Toole presented language around Board members request to staff and vendors/consultants. He presented language changes as governance, transparency, and cost concerns. Much discussion amongst all Board members and both the AG lawyer and the Board’s lawyer. It became clear that Board members can have discussions with the consultants about clarification, options, suggestions, etc. The conclusion, Board member request process will remain the same. The committee concluded with brainstorming topics for the October Board’s Education and Planning session.

Tuesday began with the Audit Committee meeting. The internal audit team was introduced and closed and open audits were reviewed. Outside consultant ACA then presented its GIPS review of STRS. STRS has been verified by GIPS and in compliance since 2006. GIPS is the “gold” standard in accountancy. Outside consultant Crowe, outside auditors, presented their current audit of STRS which will conclude in December. Crowe was chosen by the Ohio Auditor of State and is in its 1st year of a second 5-year audit contract. A brief executive session concluded the session. 

The actual Board meeting followed. Public Participation had 8 speakers, all retirees. Dean Dennis presented ORC 3307.07 giving copies to the Board members. Dennis asked why a full COLA was not being paid since money was available. Board member Allison responded, VERY UNUSUAL, thanking Dennis for his comments and commitment and reminding Dennis that pending litigation at the STRS meeting is not the correct forum. Lunch followed.

After lunch, the Health Care Committee voted for an ad hoc sub–Health Care Committee over future health care providers and staff doing a study of alternatives to STRS present approach, even mentioning PERS’ HRA program as an example. [I think the Board wants to stay balanced and aware with staff ideas.]  Christina Elliott presented Members’ Benefits Update sighting accomplishments, member experience surveys, health care insights, forces shaping future member benefits and strategic priorities.

The Executive Director's Report was different. It was his 1st anniversary with STRS. He addressed the Heritage Foundation study with his concerns about the state legislature and the STRS Board composition. He warned of Defined Benefit attacks and that actives, retirees, and STRS staff are all in, together. He emphasized strsoh.org website, trust, and verification of facts. He also commented on a national conference he attended with Board member Chad Smith. 

Routine Matters followed. Harkness was voted 2027 Board chair. Davidson was voted 2027 Board Vice-Chair. Bills were paid, and committee reports were given. Under Old/New Business Jones had an expense covered, and Smith gave his report on the national conference.

The next Board meeting will be October 21 and 22; no meeting in September.

Dan MacDonald to STRS board: "As always, put actives and retirees first. Restore actives and retirees and stop putting staff enhancements a priority."

Dan MacDonald's speech to STRS board

August 18, 2026

FROSTED GLASS

Mr. Chair and members of the Board, good afternoon. I am Dan MacDonald, an STRS retiree with 38 plus years of service and Executive Director of Local 279R, Northeast Ohio AFT retirees, regularly attending Board meetings since 2014.

Frosted glass is a translucent material created by scattering light through sandblasting, acid, etching, or applying a specialized film. It blurs visibility to provide privacy while still allowing natural light to pass through making it popular for windows, shower doors, and office partitions.

Recently, the Heritage Foundation produced Retirement at Risk: The Political Economy of Public Pension Governance. Their reporters reviewed STRS from 2003 to 2022. The article stated that STRS’s financial numbers fell short of the audited numbers 19 out of the last 20 years.

STRS replied. A report was recently published with misinformation about our investment reporting. Here’s the verified truth: [Whatever the hell Verification means]

The report confuses the total fund and valuation returns. These measurements answer different questions and are calculated in completely different ways. [True]

The authors cite an “audited return” based on their own calculations. That number is not audited and appears in no STRS Ohio audit. [True]

The claim of a multi-billion-dollar discrepancy in reporting is incorrect and is based on the authors’ flawed analysis and unaudited calculations. [Probably True]

STRS Ohio takes the extra step of independent GIPS® verification because accurately calculating investment performance is critical to the State Teachers Retirement Board’s oversight responsibilities.

The STRS reply is all frosted glass. GIPS is not an auditor; they verify. They verify the numbers given. This is stated yearly. Many years ago, the PBI payment date was moved closer to the end of the fiscal year before a finalized accounting of the just closed fiscal year.  Totally close the fiscal year’s book, THEN determine PBI, pay later, not earlier, change the PBI policy. Cancel GIPS, save some money. [Not sure of canceling GIPS anymore because of CPA Ms. Falls comments.]

As always, put actives and retirees first. Restore actives and retirees and stop putting staff enhancements a priority.