May 26, 2021
Alumni Talk: Ted Siedle Explains
"Who Stole My Pension"?

Bard College at Simon’s Rock and OLLI at BCC jointly present Forbes contributor Edward "Ted" Siedle to discuss his new book, Who Stole My Pension?: How You Can Stop the Looting. Ted, a Simon’s Rock alumnus, is nationally recognised as an authority on pensions and investment management matters. In 2017, he secured the largest Security and Exchange Commissions whistleblower award in history and in 2018, the largest Commodity Futures Trade Commission award in history.

Joining Ted for the online conversation will be Chris Tobe, a leading pension investment consultant and author of four books and dozens of articles on transparency and corruption in pensions and investments. Chris is a former member of the Kentucky state pension board. Says Siedle, "as a state pension trustee and whistleblower who contacted the SEC about mismanagement at the nation’s worst funded pension, he knows plenty about pension and investment shenanigans."

May 26, 2021
Lawsuit Filed to Force Teachers' Pension Records


By Jim Provance
Toledo Blade

COLUMBUS — A lawsuit filed with the Ohio Supreme Court accuses the pension fund for teachers of hiding behind “trade secrets” when it comes to complying with an outside forensics audit financed by its members.

The litigation, likely just the first of a series, asks the high court to order the 500,000-member State Teachers Retirement System to turn over un-redacted documents related to investment earnings, fees paid to outside money managers, and comparisons of the system's performance with similar systems across the country.

The lawsuit specifically targets reports from Toronto-based CEM Benchmarking, Inc., a consultant hired by STRS to conduct an annual cost effectiveness analysis. The filing contends that information supplied by CEM was heavily redacted to protect what it claims is proprietary information.

“We know already...that STRS staff does not know the costs of all the investments that they have made,” said Ted Siedle, president of Benchmark Financial Services and a former Securities Exchange Commission attorney who was hired by the Ohio Retired Teachers Association to conduct the forensic audit.

Read this article online at https://www.toledoblade.com/local/politics/2021/05/24/lawsuit-filed-to-force-teachers-pension-records/stories/20210524120.

May 22, 2021
Alternatives to the Current STRS Ohio Investing Strategy


By Rudy Fichtenbaum
STRS Ohio Board Member - Elect


In my last post, I wrote that one way to fix our pension was to increase employer contributions, and the second was to improve STRS investment performance. In this post I want to concentrate on the latter by looking at some alternatives to STRS investment strategy.

One alternative is to look at a purely passive investing strategy such as investing in index funds. A second is to look at innovations being used by other pension funds.

Imagine if there were another public pension that had an alternative investment strategy that yielded greater returns with less risk and is more than 100% funded. Wouldn’t it be worth looking at their investment strategy? Well, such a pension exists, and it is the Healthcare of Ontario Pension Plan (HOOPP). HOOPP has a discount rate (the assumed rate of return, which has a major impact on the unfunded liability and the funding ratio) of 5% and is more than fully funded. Like other pension funds, HOOPP has faced the challenges of two stock market crashes in the 2000’s but was better able to weather that turmoil and emerge stronger. What is HOOPP doing that STRS is not doing?

Let’s look at HOOPP’s actual returns. In 2020 they reported a 11.42% annual return, and a 10 - year return of 11.16%. Moreover, HOOPP achieved these returns while taking considerably less risk than STRS. How do they invest? They use an approach called liability driven investing. The scatter plot below shows HOOPP in the upper left-hand corner and STRS and most other pensions, all earning less than their assumed rate of return and taking more risk.

Pension funds like STRS view total expected returns as being driven by three main components: 1) risk free return, 2) contribution from the overall market return, and 3) returns from superior management skill. But what this approach ignores is that it is possible to increase returns through the use of transactional trading expertise and technology “TET”. This fourth contribution to returns is what Wall Street banks and hedge funds earn when they sell TET to pensions like STRS! But HOOPP has shown that it is possible for pensions themselves to use their comparative advantage of permanent capital that is not subject to withdrawals or redemptions to enhance returns and reduce risk through the use of transactional trading.

Is this the answer for STRS? I don’t know but given HOOPP’s performance it seems like failing to at least examine this strategy is an abdication of the Board’s fiduciary responsibility. Using HOOPP’s investment returns, STRS would be 114% funded. Not only would we have a COLA, but we might also be looking at cutting member contributions.

At the end of the day, beating manipulated benchmarks jointly chosen by STRS staff and the consultants who depend on STRS for business, as well as continually telling us that STRS is in the 90th percentile compared to peers, means nothing if STRS does not have enough assets to keep its promises to members. Telling members that we are doing better than many other pensions, is cold comfort to members who have lost their COLA or are paying 14% of their salary for a pension that has an actuarial value of 10.8%.

How do we increase returns without increasing market risk? I don’t pretend to have all of the answers. But clearly one component of that strategy needs to be reducing investment expenses, most of which are generated by STRS’s alternative and real estate investments. Another component would be to use transactional trading to enhance returns, as an alternative to active management which has clearly failed to solve our problems.

Click here to view this article with graphs.

May 15, 2021
What are the Characteristics of a Good Pension?

By Rudy Fichtenbaum
STRS Ohio Board Member - Elect

Teachers are generally people who are willing to sacrifice current income because they believe by shaping young minds, they can make a difference, helping students realize their full potential. People go into teaching because they believe in service, in giving back to communities that gave them the opportunity to get an education. Ask anyone “Who was your favorite teacher or college professor?”, and they will almost always be able to answer in an instant. They will also be able to tell you how that individual made a difference in his or her life. Teachers know they are not going to be rich, but when they started teaching, they were promised a dignified and secure retirement and a guarantee that inflation would not impoverish them.

A pension fund is not a partnership (STRS’s mission statement notwithstanding). A partnership is either a legal relationship between two or more joint principals or a relationship requiring close cooperation between parties with joint rights and responsibilities. A pension is neither. A pension fund is similar to a mutual insurance company where members get the right to select management that works in the interest of members.

STRS is our pension. We paid for it with our hard-earned money, and we have a right to expect that the people who serve on the Board will represent our interests. We have right to expect the STRS management team to work in our interest, and in return we should be willing to compensate them fairly. Although STRS engages in many of the same activities as mutual funds and hedge funds, it is fundamentally different because the people whose money STRS invests cannot withdraw if they feel they are not being treated fairly.

So, a pension needs to have a culture that ensures that the STRS management team serves members. If all you care about is making money and getting a bonus, then you are working in the wrong business. At presentations by the STRS management team at board meetings, we continually hear about how returns are exceeding benchmarks, even if those benchmarks were chosen or manipulated to enable staff to get bonuses. But even if STRS were using legitimate benchmarks and the STRS management team were outperforming, they would not necessarily be doing a good job for members. That is something that the STRS management team does not seem to understand. At the end of the day, we (the members) measure the success of the pension, not by its ability to outperform benchmarks, but by its ability to provide us with a secure pension.

So far, the only proposals put forward to “fix” our pension by the STRS management team have been to increase member contributions, raise the years of service and the retirement age, increase the years used to determine the FAS, and cut and then eliminate the COLA.

What is needed is a two-fold solution. First, the management team with the Board and the majority of stakeholders should be working together to increase state support for education, specifically to increase employer contributions. Employer contributions have not increased since January 1984. Contrast that with the 60% increase in employee contributions since 1984. A comparable increase in employer contributions would raise their contributions to 22.4%. This would still be below the median employer contribution rate of 25.3% in non-Social Security states for 2019 according to the Center for Retirement Research at Boston College. Again, contrast the low level of employer contributions with those of employees. Active members contribute 14%, far above the median in non-Social Security States, which is only 9%.

There are about 500,000 STRS members; many of us have spouses, and we all have families. Together, we can wield more than a little political power! It is time to start organizing, working to elect public officials who recognize that they must adequately fund education or risk losing the ability to attract the best and the brightest to become educators.

The second and most immediate solution is to look for new and innovative ways to invest that can increase returns without increasing risk. Instead of thinking that with active management we can outperform Wall Street or by falling for investing in new assets classes like private equity and hedge funds, we need to look at other pensions that have been successful in providing adequate funding for their members.

May 12, 2021
Impact of Pension Columns Being Felt in Columbus

By John Damschroder

Fremont News-Messenger

At the risk of sounding like a one-topic writer, I beg your indulgence for an update on the impact that attention paid to the State Teachers Retirement System (STRS) in this column is having.

Next week the Ohio Retirement Study Council will vote to release a Request for Proposal (RFP) for fiduciary and actuarial audits of STRS, six years after the legal deadline for those documents, which has only been red-flagged in this space by the Fremont News-Messenger.

Moreover, the RFP notes the requirement that the performance review be conducted by an independent fiduciary auditor.

The auditor’s conflict of interest that made the Ohio Public Employees Retirement System (OPERS) illegal will not be repeated at STRS.

Surely, that is because of national attention on investment performance and results reporting at STRS. I am not the only investigator who has noticed the vast gulf between claims of high performance and low costs by STRS and the actual results, stripped of public-relations polish.


Read this article online at https://www.thenews-messenger.com/story/news/2021/05/12/damschroder-impact-felt-columbus

May 8, 2021
Congratulations to Rudy Fichtenbaum!

Rudy Fichtenbaum has won the election for one of two retired member seats on the STRS Ohio Retirement Board. Incumbent Robert Stein won the other retired seat.

Fichtenbaum is a Professor Emeritus of Economics at Wright State University. He has a Ph.D. in Economics from the University of Missouri-Columbia, and was a faculty member at Wright State University from 1980-2015. He served as the National President of the American Association of University Professors (AAUP) from 2012-2020. He also served on the Executive Committee of AAUP at Wright State (AAUP-WSU), and as the Chief Negotiator, including during the contract negotiations leading up to the historic 2019 strike. He was also a member of the Executive Board of the Dayton-Miami Valley Central Labor Council, where he represented AAUP-WSU. He has represented the Ohio Conference of AAUP in the stakeholder’s coalition Health Care Advocates (HCA) to help save health care benefits provided through STRS for retirees. HCA eventually became Health and Pension Advocates (HPA), and he has continued to represent OC-AAUP at HPA where he has been an outspoken critic of healthcare and pension cuts.

May 2, 2021
Members of Teacher Pension Fund Planning Lawsuit to Force Transparency


By Jim Provance
Toledo Blade


Nearly 1,000 current and retired Ohio educators, skeptical of the true financial shape of their $90 billion state pension fund, are preparing to sue to force greater cooperation with a $75,000 self-funded investigation of its books.


The forensics audit, financed through money raised from members, is being undertaken by pension investment expert Ted Seidle — a former Securities Exchange Commission attorney, financial forensics investigator, and co-author of the book “Who Stole My Pension?”


The public records lawsuit will ask the Ohio Supreme Court to force the State Teachers Retirement System, serving some 500,000 active, inactive, and retired members, to release information that investment firms have claimed is proprietary or a trade secret.


“The fundamental definition characterizing a public pension fund is transparency...,” Mr. Seidle said. “Any investment not willing to comply with full transparency is, by definition, inappropriate.”


Read this article online at
https://www.toledoblade.com/local/politics/2021/05/02/members-of-teacher-pension-fund-planning-lawsuit-to-force-transparency/stories/20210430128

April 26, 2021
Internal Chief Audit Executive for STRS Announces Retirement

Audit Committee Decides a Public Posting Isn't Warranted

By Dean Dennis

Today (4/26/21) the STRS Audit Committee held an emergency meeting to address the retirement of Dave Tackett, the STRS Chief Audit Executive. The five member Audit Committee voted narrowly, by a 3 to 2 vote, not to publicly post the position of Chief Audit Executive for our 90 billion dollar pension fund.

When the five member audit committee returned from executive session, immediately a motion was made and seconded by Board members Robert Stein and Claudia Herrington to nominate current Assistant Chief Audit Executive, Robert Vance, to replace David Tackett. Board member Wade Steen voted "no," stating process as the issue. He suggested the position of Chief Audit Executive of a 90 billion dollar pension fund deserves a public posting. Board member Jeffrey Rhodes also voted "no." Breaking the tie was Board member Rita Waters whose "yes" vote supported filling the position internally. Next, the nomination will have to go before the full Board at the Board meeting in May.

As members of STRS, do you feel comfortable with the position being filled internally, or do you feel that the position deserved to be posted publicly?

April 25, 2021
Audits Await Ohio Teacher Pension
1 Investment Lost $525 Million


By Anna Staver
Columbus Dispatch


The State Teachers Retirement System of Ohio is getting three independent audits in 2021.

Two audits come from the Ohio Retirement Study Council, which advises state lawmakers on all five public pension systems.

The third audit, however, is sponsored by a group of retired teachers who say Ohio is mismanaging the pension fund while disseminating false and misleading information to stakeholders.

The Ohio Retired Teachers Association raised $75,000 for a "deep dive" into the pension fund's management, Dean Dennis said. STRS is supposedly doing well but retirees haven't had a cost of living increase in years.

It's time, Mr. Dennis said, to find out why.

Read this article online at https://www.dispatch.com/story/news/2021/03/09/ohio-retired-teacher-group-pays-outside-audit-strs/6867765002/

April 21, 2021
ORTA to File Lawsuit Seeking Records for Ongoing Forensic Investigation of STRS Ohio


Through a grassroots donation campaign that began on October 28, 2020, The Ohio Retired Teachers Association (ORTA) engaged Edward Siedle of Benchmark Financial Services to conduct a forensic audit of the $80 billion Ohio State Teachers Retirement System. Mr. Siedle, who is a former SEC attorney and internationally recognized pension expert, has performed over $1 trillion in forensic reviews of public pensions across the United States and regularly uncovers mismanagement and fraud. He has received record-breaking whistleblower awards from federal regulators for assisting government in prosecuting Wall Street wrongdoing. Public pension systems across the U.S. are notorious for paying high fees for risky investments and getting poor performance.


On February 19, 2021, the law office of Marc Dann, Ohio’s former attorney general, submitted a public records request on behalf of Mr. Siedle to STRS requesting records related to the pension’s investment managers, investment consultants, performance compliance auditor, investment cost monitor, financial auditor, custodians, as well as board and staff.


While STRS Ohio has provided hundreds of pages of documents the pension has refused to provide certain key documents about STRS investments in Private Equity and Hedge Funds. Those Documents are critical to Mr. Siedle’s ability to understand the value and appropriateness of such high-risk investments. The records withheld, many of which were withheld at the request of the investment managers themselves are clearly public records and Ohio law requires that such records be provided to the public upon request.


After months of denials of requested information and slow walking the responses, the decision has been made to file a lawsuit to compel transparency.


The lack of cooperation by STRS is even more surprising given that the pension is well-aware that ORTA’s forensic review was commissioned, as well as paid for by participants, with the stated objective of improving management and oversight of the pension. Pension fiduciaries legally required to discharge their duties with respect to the funds solely in the interest of the participants and beneficiaries should welcome an independent review by a nationally recognized expert. Further, given the longstanding, profound fiduciary breaches and disclosure failures that have already been identified at the pension, it is clear STRS can benefit from an independent review by an expert not of its own choosing.


Transparency has ceased to be a priority at STRS but remains of great importance to taxpayers in Ohio as the pension collects money paid by taxpayers through its public pension system. “Knowing how much STRS has invested in each asset and how much those assets are worth is critical to understanding the health of our public pensions,” says Robin Rayfield, ORTA’s Executive Director.


For more information please contact:

Dr. Robin Rayfield Executive Director Ohio Retired Teachers Association 614-431-7002

Edward Siedle Benchmark Financial Services 561-703-5958

April 14, 2021
Stand Your Ground to Move Pension Policy

By John Damschroder
Fremont News-Messenger

The 100 percent loss of a $525 million direct investment in Panda Power by the State Teachers Retirement System is not the end of the story.

Five STRS alternative investment funds; Ares Capital, Avenue Capital, GSO Capital, HIG Capital and Oaktree Capital, with a combined total of $1,140,969,501 from Ohio teachers retirement money also invested in the bankrupt merchant power generator Panda.

STRS says, “to our knowledge none of the funds in which we are invested with these managers have exposure in Panda.” But because these funds have been given trade secret protection by STRS, the teachers’ pension has no knowledge of what has been purchased with their dollars. It’s the way Ohio’s pensions structure their alternative investments.

The lack of detailed portfolio knowledge allows the pensions to avoid headline risk like more losses in Panda, while both fund managers and pension staff can base bonuses off asset valuations that cannot be checked.

Read this article online at https://www.thenews-messenger.com/story/news/2021/04/14/damschroder-stand-your-ground-move-pension-policy/7187844002/

April 8, 2021
Town Hall with Rudy, Liz, and Ben

Watch this recording of the Town Hall on April 8th with Rudy Fichtenbaum, Elizabeth Jones, and Ben Pfeiffer, candidates for the STRS Ohio Retirement Board.

Rudy, Elizabeth, and Ben are endorsed by the Ohio Federation of Teachers (OFT) and the Ohio Conference of the American Association of University Professors (AAUP).

"We have been sold a false dichotomy that we cannot have the pension we were promised in order to have a pension at all. It's possible to keep promises to active and retired educators and still be good fiduciaries of the STRS system. As Board members, that's what we plan to do." - Rudy Fichtenbaum and Elizabeth Jones

STRS Ohio Systematically Overstates Its Returns 2021.4.1.pdf

April 1, 2021
STRS Ohio Systematically Overstates Its Returns

By Rudy Fichtenbaum

In this post I will discuss how STRS systematically overstates its returns. The incentive for overstating returns is clear: higher returns mean bigger bonuses for the investment staff.

If you elect me to the STRS Board, I will be your advocate and do my best to get you the truth about what is going on at STRS. In addition, I will fight to change the culture at STRS to ensure that it puts member’s interests first. That means reducing expenses, fighting to increase employer contributions and restoring the COLA.

How transparent is STRS Ohio 2021.3.28

March 28, 2021
How transparent is STRS?

By Rudy Fichtenbaum

Rudy Fichtenbaum is a Professor Emeritus of Economics at Wright State University. He has a Ph.D. in Economics from the University of Missouri-Columbia.

If you elect me to the STRS Board, I will be your advocate and do my best to get you the truth about what is going on at STRS. In addition, I will fight to change the culture at STRS to ensure that it puts member’s interests first. That means reducing expenses, fighting to increase employer contributions and restoring the COLA.

March 15, 2021
Ohio Legislators: Are you aware of what has been happening with STRS?

Nearly a half-million retired, active and substitute teachers have paid into STRS Ohio. The vast majority of these contributors will need to depend upon STRS for their retirement since Ohio is a Non- Social Security State.

In September of 2012, the Ohio Legislature voted on legislation that deeply impacted Ohio's retired and active teachers. This legislation became law on January 7, 2013. As of July 1, 2013, active teachers have been required to work more years and contribute more of their salaries to STRS. Teachers retired prior to that date have not received a single COLA that was promised to them for the past 9 years. Retirees complain that, “even Social Security pays a COLA”. Research shows that in the average Non-Social Security State, the Employer's Contribution is 12% higher than that of the Employee Contribution towards their Pension Plan. But in Ohio this isn't the case; the Employer Contribution is exactly 0% higher. In essence, in Ohio, our teachers pay the most while our employers are allowed to pay the least. The maximum Employer's Contribution hasn't been raised in nearly 40 years.

The harsh legislation also turned over control of the teachers' COLA to the STRS Board. That was a mistake. The Ohio Legislature gave STRS the authority to "adjust" the COLA. The STRS Trustees completely eliminated it. STRS retirees have seen nearly 30,000 of their peers die without receiving their promised COLA. This wasn't lost on Representative Bill Seitz who, in a strongly worded letter to the STRS Board, expressed his "support of a growing coalition of STRS retirees to request relief from the harsh decision made by STRS to reduce to zero for at least 5 years the COLA adjustment for all existing and new retirees". Imagine if the OPERS Board had been granted the power to eliminate the COLA for their retirees.

As members of the Ohio Legislature, you need to step up. The Ohio Legislature needs to take back control of the COLA. There is no equity among Ohio's pension systems and no intergenerational equity within STRS Ohio. The trust level of STRS members is so low that recently they raised $75,000 within three short months for an outside forensic audit of STRS. The forensic audit is currently being conducted by Edward Siedle, a former SEC lawyer and Forbes Magazine contributor.

In Ohio, an outside fiduciary audit is supposed to be conducted every 10 years. STRS has gone over 14 years without such an audit. Meanwhile, retirees go without their promised COLA.

What will an outside forensic audit or outside fiduciary audit find? That remains to be determined. A recent news article has drawn attention to an STRS investment that went bankrupt (https://www.msn.com/en-us/money/savingandinvesting/damschroder-ohio-teachers-pension-mauled-by-panda/ar-BB1ebNBd ). The Panda International investment raises the question: has STRS Ohio lost hundreds of millions of dollars? Panda International is only 1 of over 130 Alternate Investments STRS Ohio is showing in their CAFRs report. It is interesting, because Panda filed for bankruptcy in 2017 but STRS is still holding them as an investment. (see the Open Letter to STRS Trustees on the STRS Ohio Watchdogs website for more detailed information)

Another article that raises concerns is a recent article regarding the Pennsylvania pension system. This article brought up the practice of hidden fees often referred to as "carried interest". (https://www.inquirer.com/business/joe-torsella-treasurer-pa-pennsylvania-psers-pensions-teachers-lost-harrisburg-20210220.html). The Ohio Legislature needs to investigate and guarantee that this is not a practice of its five pension systems; in particular STRS.

Members of STRS are constantly told by STRS management how well the pension is run. Members are continually told that it is one of the top pension systems in the nation. If true, the STRS Ohio Watchdogs want to know why STRS cannot provide a simple COLA to their dedicated retirees while over 90 STRS investment staff members annually receive six-figure performance bonus incentives.

Ohio Legislators, are you aware of what has been happening with STRS?

Dean Dennis
March 15, 2021

March 11, 2021
Open Letter to STRS Ohio Trustees

Trustees,

John Damschroder's "Panda article" certainly caught my attention. Here it is, if you haven't already read it. https://www.thenews-messenger.com/.../damschr.../6883736002/

You may have also seen a recent article in the Columbus Dispatch titled, "Mismanagement or misunderstanding? The outside audit of Ohio's pension fund explained." I think there is a case for "mismanagement."

Below you will find some research on the Panda investment. I thought it was prudent to share; I hope you will find it of value.

http://www.orsc.org/Assets/Reports/816.pdf (see page 29, STRS invests at least $345,000,000 in Panda Power)

https://www.institutionalinvestor.com/.../yield-hungry... (STRS Ohio is first Pension System Mentioned)

https://www.powermag.com/panda-power-funds-rolls-on-with.../ (Risky Investment)

https://www.utilitydive.com/.../panda-temple.../442582/ (Panda goes bankrupt)

https://www.dallasnews.com/.../panda-energys-backing.../ (on the way to bankruptcy Panda invests in wrestling/daughter)

https://www.strsoh.org/_pdfs/annual-reports/50-143-19.pdf (see actual page 59. We still carry Panda as an Alternative Investment and have done so since we first got involved)

Panda is only one of our 130 plus Alternative investments. As retirees go more than half-a-decade without their promised COLA, the question needs to be asked, how much money can Trustees find in investments gone awry that likely have numerous hidden fees?

Trustees, let's diligently manage our outside auditors and guarantee to members they look at our Alternative Investments both painfully meticulously. We need to make sure all expenses and fees for every investment are accounted for.

Let's also diligently manage the STRS management regarding the Forensic Audit. The $75,000 members raised for this audit equates to less than one-millionth of our $80 billion investment portfolio. No one knows what the audit will find, perhaps nothing. However, when retirees are constantly told by STRS how great STRS is doing while they go year after year without a COLA, and as active teachers work longer and contribute more for less, I think you can understand why the forensic audit is a reality.

Additionally, realize that the outside State of Ohio required fiduciary audit that is supposed to occur every 10 years has now gone more than 14 years without happening. This key piece of information wasn't highlighted by the Columbus Dispatch when they were explaining the outside audit to their readers. That said, please make sure that STRS management is transparent when it comes to all public information requests related to the forensic audit.

My best and thank you for the time you commit,

Dean Dennis
March 11, 2021

March 3, 2021
Ohio Teachers Pension Mauled By Panda

The Ohio teachers’ pension was one of the first investors in Dallas-based Panda Power. Panda is a merchant generator building plants run by cheap shale gas to produce more profitable electricity. The business model collapsed when utility regulators did not approve anticipated rates. Panda’s bankruptcy filing showed debt of $400 million against cash on hand of $2,000.

Click here to read John Damschroder's article in the Fremont News Messenger.

February 19, 2021

Forensic Audit: Game On!


Former SEC attorney and pension investigator Edward "Ted" Siedle has begun the forensic review of STRS Ohio which our Forum and the Watchdogs Forum coordinated with ORTA and ran through ORTA who commissioned the audit.


At the outset, it is clear to Ted that the pension is not as transparent as it needs to be. A tremendous amount of information regarding management of the investments has not been made public and he will need additional information from STRS. His first document request was sent today to STRS by attorney Marc Dann. Hopefully, STRS will recognize the value of the ORTA-sponsored review and choose to fully cooperate, rather than litigate.


Please take a moment to look at the document request to appreciate the depth of investigation required to determine whether our pension is being handled prudently.


Dean Dennis
February 19, 2021


Click here to view the public records request.

February 11, 2021

State Teachers Retirement System of Ohio Investigation Invites Whistleblower, Expert and Public Participation

The goal is to improve management of the massive teachers pension system and the retirement security of its participants. Click here to read the full article in Forbes.


February 10, 2021
Pension Health Update

The purpose of this article is to put the health of our pension in perspective.

As has been discussed before, STRS has about 51% of our monies invested in the stock market. One of the easiest ways to measure what impacts pension health is to look at what is happening to the stock market. The most conservative indicator is to use the S&P 500 index. The average annualized total return for the S&P 500 index over the past 90 years is 9.8 percent.

To review, other STRS investments such as real estate, hedge funds and venture capital investments are harder to quantify. It is the opinion of the Watchdogs that for the long term, not enough of STRS pension investments are in equities like the S&P 500 index.

A year ago, on 2/10/20, the S&P 500 stood at 3,318 points. However, the stock market took a tumble resulting from the COVID-19 quarantine and dropped to a low of 2,237. Afterwards, the market began a remarkable recovery. Since STRS Ohio is on a fiscal period that runs annually from July 1 through June 30, we will examine how STRS compared to the S&P 500.

On 7/1/19, the S&P 500 stood at 2,990 points. On 6/30/20, the S&P 500 stood at 3,130 points. This is a gain of 4.68%. For the same fiscal period, STRS Ohio gained 3.14%. This is roughly 33% less than the performance of the S&P 500. Calculated on STRS's $80 billion of investment monies, this means STRS Ohio underperformance to the S&P 500 cost our pension system roughly $1.2 billion.

Now, for some optimism. At the time of this update, the S&P 500 stands at 3,908 points. Using our STRS Fiscal Year starting point, on 7/1/20 the S&P 500 began at 2,971 points; this means the S&P 500 is currently up 25.4% during this STRS Fiscal Year. While we missed last year's Earning Rate Assumption by 4.3%, this year we could possibly be 17.95% above our 7.45% Earnings Rate Assumption. Let's hope STRS Ohio is investing our monies wisely and are close to what the market is giving us.

Lastly, we must fight this parity battle. When STRS pays its obligated pension benefits, roughly 50% are derived from the combination of Employer and Employee Contributions; the other 50% is derived from STRS investments. STRS needs to earn about $3.75 billion to cover pension costs. Over the last 40 years, Employee Contributions have risen to the point that they are among the highest in the nation. Our Employer Contribution Rates are among the lowest in the nation and haven't been increased in 40 years.

Please check this fact: Ohio is a non-Social Security State and Ohio lags behind the other non-Social Security States by an average of over 8% when it comes to the Employer Contribution.

Legislators, members of the STRS Ohio Watchdogs cannot support you if you are ignoring this important equity issue. STRS members pay more and receive less.

Dean Dennis
February 10, 2021

Click here for past Pension Health Updates

February 4, 2021
Ohio Retired Teacher Group Wants $78.4 Billion Pension System Audited

A coalition of retired teachers raised $75,000 to hire an outside auditor to comb through the books of the State Teachers Retirement System of Ohio.

The Ohio Association of Retired Teachers will hire Edward Siedle, a former Securities and Exchange Commission attorney, to conduct a forensic audit of STRS. Click here to read the article.

February 3, 2021
John Damschroeder: Collective Action Still Works

"The Ohio Retired Teachers Association (ORTA) raised $75,000 in donations to pay attorney-author Edward Siedle to conduct a forensic audit of the State Teachers Retirement System. ORTA wants to know why retiree cost-of-living-adjustments were cut in 2012 and eliminated in 2017, with no plans to resume the COLA payments for at least 15 years." Click here to read the article.