Governor DeWine's Response to Letters Condeming His STRS Board Appointments
Thank you for your email.
Governor DeWine agrees with your concerns about the health of retired teachers’ pensions. He has supported the need to provide annual COLAs for retirees.
Governor DeWine believes the State Teachers’ Retirement System (STRS) is responsible for providing a secure pension fund for current retirees and for future teacher retirees. He believes it is vital that STRS, management and Board have the trust of retirees and the ability to provide for a healthy investment strategy and a fair retirement system.
Last year, Governor DeWine supported Auditor Faber’s special audit of STRS; he publicly questioned how investment staff received bonuses when the retirees they serve received no raise. You can read more about this long-held stance here.
After careful consideration, Governor DeWine found it necessary to make a change in his STRS Board appointment. The Governor acted after the teachers’ vote and before election results were counted, specifically because he wished to avoid acting at a time that might interfere in this important election.
Governor DeWine expects his one appointee to the STRS Board to ask tough questions and to think long and hard about investment strategies. After all, the fiduciary responsibility of this Board is vital to the long-term health and well-being of our retired teachers and future retirees; and frankly, to the profession itself which is so vital to Ohio’s children and a well-educated and prosperous society.
The Governor believes that whoever his appointee to the STRS Board is MUST attend meetings and fully participate in transparent and vigorous discussion.
It is far past time to take a fresh look at the investment strategies, the vendors and the STRS management. Teachers rely on yearly increases to keep up with the cost of living. Teachers rely on this organization to support them after they have given themselves and their careers to shaping the future of our kids. The Governor determined that this fresh look required him to make a change to his appointee. The accusation that the Governor illegally revoked his former appointee’s appointment is false. He acted in what he believes is in the best interest of retired and current teachers.
Governor DeWine will continue to advocate on behalf of Ohio’s teachers and retirees. They deserve nothing less.
Again, thank you for contacting our office. If we can ever be of assistance to you in the future, feel free to contact us.
Very respectfully yours,
Rick Savors
Constituent Aide
Office of Governor Mike DeWine
77 South High Street, 30th Floor
Columbus, OH 43215
Editor's Reply:
I believe we must observe carefully the actions and words of Mr. Bishop, Gov. DeWine's STRS new Board appointee, and see how well they implement the clearly stated intentions of the Governor. I remain highly skeptical and believe some group, whether union or Wall Street, put a lot of pressure on the Governor to assure maintaining the status quo. The next election for a board seat comes up in 2024, leaving more than enough time to see real proof of the beliefs stated in the Governor's letter. We must be vigilant and prepared for the next steps in reforming our STRS. (A link in the letter above to the Columbus Dispatch was omitted because of copyright.)
"Ohio retired teachers to get cost of living increase in July pension checks"
By Laura A. Bischoff
The Columbus Dispatch
Published 10:19 a.m. ET May 18, 2023
Roughly 150,000 retired teachers will get a one-time 1% cost of living bump in their pension checks from the State Teachers Retirement System of Ohio.
The STRS Ohio board approved the COLA and decided to postpone a change that would've required current teachers to work 35 years for full retirement. Instead, teachers can continue to get their full retirement benefits at 34 years.
The combo of changes is expected to cost the system $825 million.
In 2012, legislators approved a pension reform package that required public employees to work longer for fewer benefits. Starting in 2013, STRS retirees received lower cost-of-living allowances and then in 2017, the cost-of-living allowances stopped.
COLA cuts were made to help shore up the pension fund. A one-time cost-of-living allowance of 3% was restored beginning in July 2022 but it's still not back to what retirees want.
'Where's Wade?'
Audience members booed, trustees threw sharp questions and people posted flyers asking "Where's Wade?" at the meeting Thursday.
It's the first time the 11-member board met since Gov. Mike DeWine revoked the appointment of Wade Steen and replaced him with G. Brent Bishop. The move came May 5, a day before ballots were tallied in an election of another board seat.
The governor's office cited Steen's attendance record − missing three of six meetings − as reason for the change.
Board member Julie Sellers asked STRS Director Bill Neville for details on how DeWine's office obtained the attendance records and when Neville was notified of Steen's replacement.
Board member Rudy Fichtenbaum, an ally of Steen's, said it's shocking that the governor's office checks attendance records of DeWine's appointees to dozens of boards and commissions. "This does not pass the smell test," he said.
Steen, who has hired an attorney, maintains that he is supposed to serve his board term through September 2024, not at the pleasure of the governor. He sent a letter May 17 to board members notifying them that his STRS account had been deactivated.
Infighting on the board has been ongoing for a couple of years and members voted for new trustees in the past two elections. The board oversees roughly $95 billion invested for 500,000 teachers and retirees.
Retirees are angry over the elimination of cost-of-living allowances, a perceived lack of transparency and the payment of bonuses to pension investment staff.
---------------------------------------------------------------------------------------------------
A 1% dried bone
to placate old dogs (editorial)
Remember that the 1% is based on your final average salary at the time you retired, NOT on your current retirement benefit.
Not a word in any of the releases I've seen about any real reforms, transparency or truth.
It is becoming more and more apparent that big money from Wall Street and union pressures killed Steen and our immediate chances to get reform moving. Wall Street banks and investors make $100's of millions in fees - though no ne really knows how much or for what, something Ted Spiedel is still trying to ID - as "guardians" over our funds, some of which apparently don't have anything in them to guard, and all with no accountability.
Are you placated now?
The Columbus Dispatch
Ohio teachers pension fund leaders have no real plan, only propaganda
"What STRS doesn’t admit is the truth: They have no real plan to restore benefit cuts and to provide a COLA for retirees."
The recent article “Ohio teacher pensions: Control of the board, $95B at stake in election” is certainly correct in making the statement that the State Teachers Retirement System of Ohio board election — which is now taking place — is a pivotal moment for the State Teachers Retirement System.
However, the issues in this election centered around an “unproven investment strategy” are incorrect. If anything, the issues center around the current STRS investment strategies, which have failed to deliver the resources needed to keep the promises made to Ohio’s teachers.
Recently, investment expert Richard Ennis, who was hired by Ohio to help clean up the mess at the Bureau of Workers Compensation in the aftermath of “Coingate," wrote a Toledo Blade essay that explained how STRS had “underperformed a passively investable benchmark by 1.62 percentage points per year for ... 13 years...” and “much of the underperformance could be attribute to unrecouped investment expenses incurred by STRS.”
Active teachers are working longer and paying more, but will receive less when they retire.
A large part of what they will not receive is their guaranteed cost-of-living adjustment, which the STRS Board eliminated. How will active teachers fare over time, since they will not receive Social Security in retirement and will also not have a COLA?
Those who are already retired did so with the promise that they would receive a COLA; however, after making that irrevocable decision, they have found over the last decade that the STRS Board reneged on its promise. Retirement for active teachers and for those already retired without a COLA is a formula for impoverishment.
In Ohio, a non-Social Security state, asking active teachers to work longer, pay more, receive less, and retire without a COLA is asking them to take a vow of poverty in their golden years.
This hurts all Ohioans. It will also surely drive the best and the brightest teachers, who are among the most educated individuals in Ohio, to look for work elsewhere or to choose a different profession. That is what is truly at stake in this election.
What also is at stake in this election is a lack of transparency and an investment staff that feels entitled to millions of dollars annually in bonuses while the pension loses billions of dollars each year.
What is at stake in this election is the senior leadership of STRS, which continuously releases a stream of propaganda, telling members, the public, and the Ohio Legislature that everything is okay and that STRS is one of the best pensions in the country.
They paint a picture that members are happy; indeed, they are not. What STRS doesn’t admit is the truth: They have no real plan to restore benefit cuts and to provide a COLA for retirees.
STRS Ohio loses around $320 million a month (approximately $10.7 million per day) because expenses are greater than contributions. This difference needs to be made up from investment income.
What STRS senior management and their Board member supporters don't say publicly is that STRS cannot invest its way out of this crisis. In other words, active teachers will have to continue to work longer, pay more, receive less, and retire without a COLA. Teachers currently retired are left worrying if they can make it without any inflation protection.
The truth is, STRS Ohio needs more money to keep its promises and that money will not come from the proven failed investment strategy that STRS is using. At the end of the day, this election is about transparency and facing the truth. It is about electing Board members that will hold staff accountable. It is about electing Board members who are willing to face up to the problems the pension has and are willing to look for real solutions.
Dean Dennis is a retired Cincinnati Public Schools teacher. He is president-elect of the Ohio Retirement for Teachers Association
Retired teachers criticize $11.1 million bonus proposal for pension’s investment staff
-
Published: Apr. 28, 2023, 2:47 p.m.
COLUMBUS, Ohio – The board governing the state’s teacher pension fund is considering awarding $11.1 million in bonuses to its investment staff, as retirees wait to see if the fund will offer a cost-of-living adjustment amid high inflation.
The proposed bonuses for 91 investment department staff at the State Teachers Retirement System of Ohio (STRS) is even higher than the controversial bonuses awarded last year, when the fund lost money during a down year for the market. Last year, the fund originally budgeted $8.5 million for bonuses but awarded $9.7 million.
The Ohio Retirement for Teachers Association, which has been critical of the fund’s management, notes that this year’s bonuses are nearly a third higher than what STRS budgeted last year. But the pension fund says the bonuses are based on hitting board-approved benchmarks.
“STRS leadership has always put their interests ahead of teachers,” said Robin Rayfield, executive director of the Ohio Retirement for Teachers Association. “After a public outcry over $10 million in contrived bonuses after losing $5 billion dollars last year, it’s shameful to ask for a 30% increase in bonuses when STRS has done nothing to provide relief to active and retired teachers. The current STRS board election is a referendum on a broken culture where STRS staff get paid first and teachers get paid last.”
The pension had around $88.1 billion in assets at the end of March. It serves about 500,000 working public school teachers who pay into the plan, former teachers and retired teachers, who receive benefits.
The Ohio Retirement for Teachers Association and STRS board have battled over austerity measures that the pension implemented over the past decade – including reducing, and then eliminating, a yearly cost-of-living adjustment.
Last year when the fund lost around $4.7 billion and investment staff got bonuses, the board also voted to give retired teachers a 3% cost-of-living adjustment, after around seven years of no increases.
Dan Minnich, STRS’ chief communications officer, said the bonuses are based on board-approved investment benchmarks and a performance-based incentive policy. Investment performance is crucial in both up and down markets for securing the financial condition of the pension fund, he said.
The STRS performance-based bonuses are available only to staff in the investment department, which has 91 people out of a total of 489 STRS employees. No other associates, including senior management, receive a bonus, Minnich said.
The preliminary total net return in the fund from July 1 through March 31 was 4.2%, Minnich said.
“It comes down to math—if investment managers outperform the board-approved benchmarks under the board-approved PBI policy, meaning the investment managers outperform the market, the investment managers receive an incentive for that outperformance,” he said.
And there’s a possibility that teachers will get another cost-of-living increase, which would go into effect July 1.
“The board had a robust discussion with its actuary last week to determine if additional benefit enhancements might be prudent next fiscal year,” Minnich said. “This conversation will continue at the board meeting next month. The Retirement Board wants to pay retirees every penny possible. But the Board must—under Ohio law—only make benefit improvements that the Board actuary says will not materially impair the fiscal integrity of the pension fund.”
The Ohio Retirement for Teachers Association, which recently changed its name from the Ohio Retired Teachers Association, is also watching an election on the STRS board.
Arthur Lard, whose term ends Aug. 31, is up for reelection, having first joined the board in 2019. Lard is a business education teacher from Portsmouth City Schools. He’s a member of the Ohio Education Association and the union has endorsed and is actively supporting his reelection, said OEA President Scott DiMauro.
His challenger is Pat Davidson, a business and computer teacher in the Berea City School District. Davidson is a member of the Berea Federation of Teachers, and is supported by the Ohio Federation of Teachers.
The Ohio Retirement for Teachers Association is also backing Davidson, believing he’ll challenge STRS staff more than Lard does.
The election results will be announced May 6.
Editorial: The STRS Board is shoving it's disdain for our retired educators down our throats. They seem willing to go to any lengths to 'ghost' the membership and damage our future. ORTA/ACRTA members must unite and raise their voices in protest.
ORTA (You!) -
In the Know
and Ready to Act on Impending Legislation
The Legislative Committee of ORTA met via zoom on March 21, 2023. The committee members participating included Carol Kinsey (Northeast Liaison), Chris DeMarco (ORTA President), Steve Seagrave (Henry County Legislative Chair), and Robin Rayfield (ORTA Executive Director).
Several legislative issues/bills were discussed and the notes below represent much of the discussion of the group.
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:
-
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.
-
Since 2000 approximately $25 billion has been directed to private schools undermining support for public schools.
-
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.
-
SB 11 would open the doors to home schooled parents to receive vouchers to educate their children at home.
-
This legislation is the biggest threat to the common public school and will devastate the public school as we know it.
-
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:
-
Determine who your local state officials are. You can find your representative or senator here: https://www.legislature.ohio.gov/members/house-directory https://www.legislature.ohio.gov/members/senate-directory
-
Write or call your elected official and voice your opinion on the legislative proposals.
-
Remember, it is far more effective if multiple people make contact with an elected official one time than if one person makes contact several times.
-
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.
-
Another place to locate your elected official using your address is here: https://openstates.org/find_your_legislator/
Ohio STRS Undermines Its Own Trust and Integrity - Again
COLUMBUS, Ohio (WCMH - FOX8) — Ohio’s teacher retirement system paid out $10 million in staff bonuses the same year its pension fund lost over $5 billion, according to updated figures released Thursday.
Two months after the State Teachers Retirement System of Ohio (STRS) Board awarded its 100-member investment staff with hefty performance bonuses, the pension fund announced its net investment losses totaled $5.3 billion in the fiscal year ending in June 2022 — a 75% increase from the $3 billion in investment losses initially calculated, according to a copy of STRS’ unaudited financial statements.
“It was bad enough that STRS rushed to award $10 million in staff bonuses after only losing $3 billion last year,” Robin Rayfield, executive director of the Ohio Retired Teachers Association, said in an email. “With this new data, we know now that STRS actually lost $5.4 billion last year and still awarded millions of dollars in bonuses to almost 100 bureaucrats.”
In August, the board voted 9-2 to approve the bonuses because its investment staff outperformed the board’s performance benchmarks, according to STRS spokesperson Nick Treneff. The bonuses — which have been awarded every August for the past three years in accordance with STRS policy — are part of a five-year performance model, he said.
Some retired teachers in Ohio said the hefty bonuses awarded to investors felt like a slap in the face to retirees who have not received a cost of living adjustment in their pensions for years. The board, however, approved a one-time 3% COLA for retirees in May.
At Thursday’s meeting, Rayfield demanded STRS leadership return the $10 million in bonuses he claimed were “seemingly approved on misleading and incomplete financial data” that at the time indicated $3 billion in losses...
[the rest of the news report may be found here:
https://fox8.com/news/ohio-retired-teachers-pension-fund-suffers-5-3-billion-loss-as-staff-get-bonuses/ ]
{Editorial: I consider Mr. Treneff's defense of the board as misleading or maybe deceitful. The majority of the board cowers in the presence of the staff and rubber stamps whatever they are told by the staff. The benchmarks are set by the staff itself so as to guarantee the bonuses are earned. Does the staff ever fail to meet its own benchmarks and receive bonuses? They rewarded by themselves this year because the losses suffered were supposedly not as bad as some other pension funds' losses, but now we see that they were as bad or worse. They expect us to believe that not one of over 100 "incredible" and extraordinarily well-paid investment managers had any idea of the real losses. This is only a symptom of the sad culture at our retirement system. While I won't question Mr. McFee's description of the staff as "incredible, hardworking, dedicated professionals" - I don't know any of the investment team - I sense a case of the inmates running the asylum. I have worked under boards of education who individually were wonderful, committed, knowledgeable, etc., but as a team provided terrible decisions and leadership. I never worked in a school where the teachers and staff - the employees - dictated to the administration and board - the employers - what to do. A lack of transparency, honesty, integrity, and accountability and the right relationship between the board and staff are the problem.}
We’ve Only Just Begun!
With the election of two ORTA-supported STRS Board members, we have won only one battle in a much larger war. We must get one more active teachers Board member elected next May. NEA and OEA will spend millions of dollars against us – even more than they did in the last election - to retain control of the Board, to keep the status quo, and to protect their Wall Street alliances and current unjustifiable staff benefits.
This is not an effort to just re-establish an already-state-lay mandated COLA. The STRS Board must begin to value the welfare of retirees.
The current majority on the Board employs the STRS staff which should be there to the benefit of us retirees and future retirees. Unfortunately, the Board has totally surrendered to the dictates of the staff, which with the support of the current majority on the Board, will fight to protect their own outrageous benefits and self-interests. We must continue to demand an open, honest, and transparent board that has the will to represent the interests of those who paid/pay into the system.
In addition to making contact with legislators, writing editorial letters, and sharing information with other retirees, we need to make contact with active teachers and help them understand what is happening to their future retirements.
Many of our ORTA/ACRTA members are also supporting two other independent groups who are fighting to change the culture of the STRS Board and turn what should one of our greatest advocates back to showing as much honest concern for our welfare as they do for their own. There is NO COST to join either one.
1. STRS Ohio Watchdog. These fighters for retirees have researched and accumulated a wealth of resources documenting and trailing the misfeasance (or maybe malfeasance) of the Board and actively fight for our benefit:
STRS Ohio Watchdogs https://www.strsohiowatchdogs.com/
and also on Facebook at https://www.facebook.com/groups/STRSOhioWatchdogs/members/
2. The Ohio STRS Member Only Forum provides an information exchange for members who are doing extensive research into the activities of the STRS and its Board members, past and present. They have identified many incriminating documents and data.
Ohio STRS Member Only Forum (moderated by John Curry) at
https://www.facebook.com/groups/OhioSTRSMemberOnlyForum
Click HERE to read a sample of articles shared from these two websites.
Finding Your COLA
Many of our ORTA/ACRTA members have asked how to find their COLA amount and effective date. Here are the steps to follow:
1. Log onto STRSOH.org
2. Login (username/password)
If you have never logged onto your retirement account, you will create your account first.
3. Complete "Multifactor Authentication" process.
4. Click on “My Home Page”.
5. Click on "Recipient Account".
6. Scroll down to access “Cost of living adjustment (COLA)”.
7. Your “Anniversary date” and “effective date” of your COLA will be posted.
8. Your retirement base (Benefit Base for COLA) on which the 3% will be determined is shown. All COLA increases are calculated on the original benefit amount (base) and are not compounded.
9. Your monthly increase (before taxes and deductions) is shown.
ORTA
Success
All Ohio Retired Teacher Association endorsed candidates were elected to the STRS Board. You indeed have made a difference and proved again that "Together we can" - and did. This is just the first battle in a long war, but there may be hope that the benefits retirees have long been due will finally begin to be re-established and that common sense and integrity will again guide our STRS.
Please click below to see official results:
https://www.strsoh.org/news/2022/retirement-board-election-results.html
Save our Cola