Past Posts 2021

December 29, 2021
2022 STRS Ohio Retirement Board Elections 

Three seats on the STRS Ohio Retirement Board will become vacant in 2022: two contributing (active) seats and one retiree seat. 

Candidates for those seats are now collecting signatures to be placed on the ballots for the elections in the spring of 2022.

Electronic copies of signed petitions are not acceptable. Hard copies only!

Only retired teachers can sign nomination petitions for retired candidates.

Only contributing (active) teachers can sign nomination petitions for contributing (active) teachers.

Retired teachers living out-of-state CAN sign nomination petitions. 

Elizabeth Jones (Retired)


Mail signed petitions to Elizabeth Jones at 715 Castlegate Lane, Unit 301, Cincinnati, OH 45231.

Steven Foreman (Contributing/Active)


Mail signed petitions to Steven Foreman at 980 Eastward Circle, Zanesville, OH 43701.

Julie Sellers (Contributing/Active)


Mail signed petitions to Julie Sellers at Cincinnati Federation of Teachers, 2368 Victory Parkway, Suite 100, Cincinnati, OH 45206.  

STRS Employer Contribution 12:9:21.pdf

December 9, 2021
Dear Elected Official

Read what is being said nationally about STRS Ohio, "To be honest, it's hard to even call this a "retirement" system at all. The system is functioning like a debt accumulation tool and a tax on teachers, with retirement benefits on the side." Here is another quote with national exposure, "Another way to say this is that the majority of the worst performing states are all non-Social Security states. Under Ohio's defined benefit pension plan, for example, teachers are not getting any employer provided retirement benefits at all."

Which Side Are You On.pdf

December 7, 2021
Which Side Are You On?
By Rudy Fichtenbaum

I have titled this post “Which Side Are You On?”, an old union song written in 1931 during the Harlan County Coal War by Florence Reece after the sheriff, hired by the coal companies, entered her house, and terrorized her and her children, looking for her husband, Sam, a union leader. 

Our pension has a problem and It’s time for the Board to decide, “Which Side Are You On?” 

Are you on the side of members or on the side of those who profit at members’ expense?

November 22, 2021

The Secret Is, 'Everybody Gets Rich Except the People Who Put Money In'

By Matthew Cunningham-Cook, Daily Poster

"Ohio could be the first place where the secrecy surrounding public pensions and their investments in risky, speculative and high-fee investment vehicles could be looked at in a serious way," said Ted Siedle, a former SEC attorney and longtime pension whistleblower.

Pointing out that pension funds across the country have routinely invoked "trade secrets" exemptions to deny the public information about investment performance and fees, Siedle said the actions taken by the state auditor and securities commissioner "could be the beginning of the end" of such secrecy — not just in Ohio, but nationwide.

As Siedle put it, "Ohio could be the first place where this secrecy is lifted."

Click here to read this article online.

CEO of Cliffwater Gets an F in Elementary School Arithmetic 11:22:2021.pdf

November 22, 2021
CEO of Cliffwater Gets an F in Elementary School Arithmetic

By Rudy Fichtenbaum

"It appears the CEO of the firm that advises STRS on alternative investments doesn’t understand basic arithmetic. Perhaps that explains why we lost $0.5 billion investing in Panda Energy and more importantly why our alternative investments can’t beat a real benchmark." - Rudy Fichtenbaum

November 19, 2021

NBC News NOW: Record Inflation is Making Things Difficult for Americans with Fixed Incomes

NBC News correspondent Hallie Jackson talks to Ohio retired teacher Jan Stewart about the suspension of the COLA in 2017 by STRS Ohio and how the lack of a COLA is impacting her budget and her life.

Scroll down to read the accompanying story by Gretchen Morgenson, NBC Senior Financial Reporter.

November 19, 2021

As Prices Soar, Cost-of-Living Increases for Pensions in Many States are Not Keeping Up

By Gretchen Morgenson
NBC News

Like many Americans, Jan Stewart is facing a new problem this fall: how to live on an income that stays the same while her cost of living skyrockets.

A retired elementary school teacher in Toledo, Ohio, Stewart receives a monthly check from the pension she paid into for 31 years. But the size of her checks, and those of 157,000 former Ohio teachers like her, does not rise even when basic costs of living do. Public pension recipients across the nation are in the same boat.

Click here to read this article online.

November 15, 2021

Open Letter to Ohio Legislators

Dear Ohio Legislators,

The Ohio Legislature Needs to Adjust the STRS Elected Board Seats.

There are 167,838 active teacher members in STRS and 157,418 retired teacher members in STRS. This breaks down to a ratio of 51.6% active members and 48.4% retired members.

Currently, retired teachers are only permitted to elect 2 elected Board members out of 7 seats. Even if retirees were granted an extra seat, being allowed to elect 3 trustees out of the 7; retirees would still be under-represented, but the parity would be less discriminatory than it is today.

This is the year to make the change because there are two active board seats up for election in the Spring of 2022. This only occurs once every 4 years, see §3307.06(A) . We seek your help in ending this inequity against Ohio's retired teachers.

Please take action by sponsoring, or supporting, legislation that will rectify this inequity before the election that takes place in the spring of 2022.

This letter has the full support of the Ohio Retired Teachers Association, the Ohio STRS Member Only Facebook Group and the STRS Ohio Watchdogs which represent over 45,000 members.

Thank you,

Dean Dennis
Founder, STRS Ohio Watchdogs
Legislative Liaison, ORTA

Dr. Robin Rayfield
Executive Director, ORTA

This letter was sent via email to all of Ohio's Legislators on November 15, 2021.

November 15, 2021
Private Equity’s Mighty Battle Against Public Pension Transparency

By Edward Siedle, Forbes Contributor

Pensions agreed not to ask PE managers to provide fund prospectuses to stakeholders and the PE firms happily agreed not to tell stakeholders the ugly truth about their business practices.

Read a private equity prospectus, offering memorandum, limited partnership or subscription agreement closely and you’ll quickly learn why these funds resist public scrutiny like vampires run from sunlight.

Click here to read this article online.

November 9, 2021
19,000 Retired Ohio Teachers Want Pension Prospectuses, Wall Street Wolves Say No Way

By Edward Siedle
Forbes Contributor

In Ohio and across the nation, prospectuses and other documents regarding public pension investments are being kept secret from government workers who had no say in selecting the investments for their pensions. Most closely guarded are the documents related to the highest-cost, highest-risk so-called “alternative” investments—information which is routinely provided to wealthy investors and industry insiders who, unlike government workers, can afford to lose a substantial portion of their savings in these funds.

Click here to read this article online.

November 1, 2021
Three Retirement Board Seats Up for Election in 2022

In spring 2022, STRS Ohio will hold an election for two contributing member seats and one retired teacher member seat on the State Teachers Retirement Board. Robert McFee and Jeffrey Rhodes currently hold the contributing member seats while Rita Walters holds the retired teacher member seat.

Those eligible for nomination for the contributing member seats are individuals presently contributing to STRS Ohio, those who have contributions on deposit with STRS Ohio and disability benefit recipients. Those eligible for nomination for the retired teacher member seat are Ohio residents who are current service retirement benefit recipients, including disability benefit recipients who have converted to service retirement under the Defined Benefit Plan. By law, STRS Ohio retirees employed in a position requiring them to make contributions to the system (commonly referred to as "reemployed retirees") are ineligible to serve as a member of the board.

Individuals interested in running for these seats can request petitions from STRS Ohio beginning on Nov. 1, 2021, by calling toll-free 888‑227‑7877. The deadline for returning petitions is Feb. 25, 2022. STRS Ohio members will receive their ballots and voting information in April; they will have through May 2 to cast their vote. The winners of the election will begin their four-year terms on the board on Sept. 1, 2022. Board members are not compensated for board service other than reimbursement for actual, necessary expenses.

October 29, 2021
Audit Set for Teachers' Pension 

The State of Ohio
By Karen Kasler, Ohio Statehouse News Bureau Chief

With inflation on the rise, more than 150,000 retired Ohio teachers have less money to spend because they’re not getting an annual cost of living adjustment.

And the decision to suspend that has sparked lawsuits and a special state audit into the teachers’ pension fund.

Guests: Ted Siedle and William Neville

October 27, 2021

Damschroder: Ohio Teachers Use Facebook to Force Pension Audit

By John Damschroder, Columnist

Fremont News Messenger

It’s hard to find a positive story about social media, but the thousands of retired Ohio teachers who’ve created two large and fast growing groups to monitor their retirement system — STRS Ohio Watchdogs and STRS Members Only — have produced an outcome that is hard to imagine without Facebook.

Because hundreds of these STRS monitors reacted within minutes to my suggestion they contact the Special Investigations Unit of the state auditor’s office, STRS confirmed a forensic audit was underway, during their board meeting last week.

As Facebook fights for redemption in the national media and during Congressional hearings, it would do well to tell the story of how it empowered Ohio teachers to literally force state government to do its job on oversight of their pension.

Read this story online.

October 22, 2021
Audit Set for Teachers' Pension Fund

Karen Kasler, Ohio Statehouse News Bureau Chief, talks about the special audit to be conducted by the Ohio Auditor of State's office. Click here to watch the video.

The State of Ohio is a weekly news program spotlighting the latest happenings at the Statehouse, in the Governor's office, at the Ohio Supreme Court and throughout the Buckeye State, hosted by the award-winning Karen Kasler.

October 20, 2021
Special Audit Planned into Ohio Teachers' Pension Fund

The Statehouse News Bureau | By Karen Kasler

The state auditor is planning a review of the pension fund for Ohio’s teachers. This comes as the board for the State Teachers Retirement System gets together for its monthly meeting Thursday.

A letter obtained by the Statehouse News Bureau says the auditor’s office is considering a special audit based on a report by Ted Siedle, who was hired by retired teachers questioning STRS’ stated fund performance and management fees.

Siedle, a former SEC asset management lawyer and head of a firm called Benchmark Financial Services, wrote a report that blasts STRS for lack of transparency and legislative oversight and mismanagement of billions he says could restore a cost of living adjustment suspended in 2017.

“One of the key problems that STRS has that they've lost the trust of their participants. Schoolteachers don't trust them anymore," Siedle said.

STRS blasted Siedle’s report as baseless and said it’s handed over 22,000 pages of documents, and has also said the pension fund has outperformed the market over the past decade.

STRS has confirmed the special audit and said it's cooperating with the auditor's office.

Read this article online.

October 7, 2021
Everyone Is Urging SEC To Stop Public Pension Mismanagement, Looting By Wall Street

By Edward Siedle, Contributor, Forbes

My investigation of the $90 billion-plus State Teachers Retirement System of Ohio commissioned by the 19,000 members of the Ohio Retired Teachers Association was completed in June. The damning preliminary findings have now been reported to Ohio legislators, regulators and law enforcement.

The report concluded the state pension had long abandoned transparency; legislative oversight of the pension had utterly failed; Wall Street had been permitted to pocket lavish fees without scrutiny; investment costs and performance may have been misrepresented; and failure to monitor conflicts may have undermined the integrity of the investment process, as billions that could have been used to pay retirement benefits promised to teachers have been squandered.

Read this article online.

September 23, 2021
STRS Fiscal Year Investment Costs Raise Questions of Credibility

By Dean Dennis, Founder
STRS Ohio Watchdogs

In the August 20, STRS eUPDATE, STRS stated the 2021 Fiscal Year (FY) Total Gross Returns were 29.28% and the Total Net Returns were 29.16% . This is, "after all management fees and costs, including carried interest and other fund expenses." This breaks down to investment costs of 12 basis points (bps). This was a good year, returns were near record highs, bonuses were paid and investment costs were low.  

Investment costs were exceptionally low, and our Trustees should be skeptical.

STRS advertises they are one of the top tier premiere pension systems in the United States. They make this claim with the support of many of their paid consultants. One such consultant is CEM Benchmarking.  CEM works with over 400 fund sponsors worldwide providing objective actionable  benchmarking insight. A pension system would hire CEM to make sure pension costs are reasonable and provide value. CEM, using STRS's numbers, supports the STRS top-tier pension claim. 

STRS members question the STRS claim.  A top-tier pension system pays a COLA.  STRS no longer pays one. A teacher who retired after 2013 has never seen a COLA.  All retirees have gone at least 5 year without a COLA.  The best pension systems don't rate last in the United States by providing the least value for employee contributions. This disconnect rallied STRS members to raise $75,000 of their own money to hire nationally renowned forensic auditor  Edward Siedle of Benchmark Financial Services (BFS), to perform a forensic audit of STRS. 

The money was well spent and identified many issues. Top among the issues was money being lost to Wall Street in fees, cost and carried interest. This was detailed in the BFS report titled, The High Cost of Secrecy. Shortly after the release of the Siedle report, STRS Ohio released their own report titled, STRS Ohio Response To Benchmark Financial Services (BFS) Report.

Unintended, the STRS Ohio Response to the BFS report raises red flags about the credibility of STRS Fiscal Year (FY) 2021 investment costs of only 12 (bps).  Here's why.  

In the STRS report, rebutting the BFS report, on pages 27 and 28, STRS defends their FY 2018 investment costs of 37 basis points.  However, these costs were adjusted upwards by their own consultant, CEM Benchmarking, to 40.1 basis points. Making matters worse, the BFS report states STRS investment costs really are around 61.3 basis points and CEM states similar peer pension systems average investment costs are 54.5 basis points. 

Clearly, if STRS investment costs were higher than the 54.5 bps average it would challenge their top-tier pension system reputation. 

To reinforce their FY 2018 investment cost claim, STRS states in their BFS rebuttal that CEM "correctly reported our actual investment costs as $279.1 million or 36.9 basis points." Digging deeper, embedded in their investment cost claim defense, one of the reasons they were not 61.3 bps as stated by Siedle, or 40.1 bps, as adjusted by CEM,  is because they didn't include carried interest arguing, "carried interest is not a fee." STRS held steadfast that their investment costs were 14.5 bps lower than their peers.  

So with that, one controversy is now being replaced with another.

Here's why there is reason for skepticism; how can FY 2021 STRS investment costs only be 12 basis points and include carried interest?  In 2018 investment costs, thought to be too low,  were redacted by their own advisor, CEM.  Without including carried interest, investment costs were stated as 36.9 basis points.  In 2021, STRS states investment costs "after all management fees and costs, including carried interest and other fund expenses" are only 12 bps.  

How is this credible?  

Let's hope our Board Chair and other trustees find out and can offer an explanation.

September 12, 2021
Editorial: Report Finds STRS Didn’t Check Its Math

Editorial Board
Toledo Blade

“Surprise, surprise, surprise,” as TV character Gomer Pyle used to say.

That’s the only possible response to the news that the state’s teachers pension fund trashed the findings of an independent review of how the fund handles, or truthfully, mishandles, the monies with which they are entrusted.

The review was conducted by Ted Siedle on behalf of the Ohio Retired Teacher’s Association. Needless to say the review found problems — some of them already well-documented. Mr. Siedle is a former attorney for the Securities and Exchange Commission.

It doesn’t take a study to figure out that losing half a billion dollars on one investment alone shows a level of incompetence that must have taken a great deal of effort to achieve.

Click here to read the editorial online.

September 10, 2021
State Teachers Retirement System Of Ohio Resorts To Pension Theatre To Defend Costly Secretive Investments
By Edward Siedle, Contributor, Forbes

Fully two and a half months after my firm, Benchmark Financial Services released a report commissioned by the Ohio Retired Teachers Association entitled The High Cost of Secrecy: Preliminary Findings of Forensic Investigation of the State Teachers Retirement System of Ohio,” the staff of STRS finally prepared an analysis of the BFS report “for discussion at the STRS Board meeting” on August 19, 2021. This first in-person meeting of the pension board in over a year was open to the public and hundreds of angry Ohio retired school teachers showed up to let it be known they had lost confidence in pension managers.

“This was not a board response. To my knowledge, the board was never told staff was drafting such a response.” Newly-elected board member Dr. Rudy Fichtenbaum, an economist, said, “It appears to me to be neither an official response of the pension nor its board.”

I encourage anyone with an interest in public pensions generally, and Ohio’s public pensions specifically, to read the BFS Report, the so-called STRS Response, and the final BFS Response to STRS Staff, to gain an awareness of the troubling issues which are emerging related to the management of these severely underfunded funds. Come to your own conclusions about whether secrecy, pervasive conflicts of interest, abusive Wall Street business practices, hidden and excessive investment fees, and potential violations of law may be undermining the financial performance of these retirement funds. Whether you’re counting on public pensions for your retirement security or supporting them as a taxpayer, understand your money is at risk.

Click here to read Siedle's full article.

Scroll down to read The High Cost of Secrecy and other documents cited in Siedle's article.

September 8, 2021
Your State Pension Is Not Fully Protected Under Law

By Edward Siedle, Contributor, Forbes

State and local government pensions assure workers and retirees that they enjoy the same protections as the comprehensive federal law, ERISA provides to corporate participants. That’s simply not true. Don’t count on state law to protect your retirement security.

However, if pensioners globally take an active role in scrutinizing their pensions, asking probing questions, identifying irregularities, funding investigations through “crowdfunding” and sharing all they have uncovered with regulators and law enforcement, regulators and law enforcement will become more familiar with pension matters and more likely to make pension protection a priority.

Read the full article online.

September 8, 2021
Grendell & Plummer Introduce HB 14

Rep. Diane Grendell and Rep. Phil Plummer introduce Ohio House Bill 14.

Short title: Regards state retirement system duties, fees, and salaries

Long title: To amend section 145.11 and to enact sections 145.096, 145.117, 145.118, 742.117, 3307.155, 3309.151, and 5505.066 of the Revised Code regarding state retirement system fiduciary duties, Public Employees Retirement System management fees and employee pay, and creating the Committee on Pension Salaries and Fees.

Rep. Phil Plummer sits on the Board of the Ohio Retirement Study Council (ORSC).

Read Ohio House Bill 14

September 6, 2021
Jim Provance: Ohio teachers pension fund rejects independent review's findings

Ohio's nearly $95 billion pension fund for teachers has pushed back against preliminary findings of an independent review funded by retirees that claims the system lacks transparency and has paid excessive fees and performance bonuses for investments that have “massively underperformed.”

Mr. Siedle was hired by the Ohio Retired Teachers’ Association, which had independently raised $75,000 to fund its own audit of STRS books and practices to see if what they'd been told about the fund's current and projected health are true.

A public records lawsuit will ask the Ohio Supreme Court to force the State Teachers Retirement System to release information that investment firms have claimed is proprietary or a trade secret.

Click here to read the full article online.

August 27, 2021
Controversial Consultant Hired For Long Overdue Audit

By Edward Siedle, Contributor

Once again demonstrating the Ohio Retirement Study Council’s apparent inability to provide intended legislative oversight of the five state pension systems in Ohio, the Council recently—following years of growing public outcry—finally commissioned a long-overdue fiduciary performance audit of the State Teachers Retirement System of Ohio. The last fiduciary audit of the pension in 2006, took an unimaginable two years to complete thanks to repeated sharing of draft versions of the auditor’s report as well as discussions with both pension and Council staff who provided written comments. Many of the most serious deficiencies noted in 2006 have not been addressed to this day.

Read Siedle's article online at

August 27, 2021
Benchmark Financial Services Response to STRS Ohio Staff “Analysis for Discussion with Board” at August 19, 2021 Meeting

Fully two and a half months after Benchmark Financial Services released a report entitled “The High Cost of Secrecy: Preliminary Findings of Forensic Investigation of the State Teachers Retirement System of Ohio,” the staff of STRS finally prepared an analysis of the BFS report “for discussion at the STRS Board meeting” on August 19, 2021. While the long-overdue staff analysis is misleadingly titled, STRS Ohio Response to BFS Report, we note with great emphasis it is neither an official response of the pension nor its board. It is simply a defense of pension staff, crafted by staff, with the assistance of its paid consultants. Thus, whether any pension board members even agree with the staff is unclear, especially since the staff strategically only provided the board its analysis days before the meeting.

Indeed, immediately following release of the BFS report months ago, one sitting board member and another member-elect—both unique in possessing financial expertise—issued detailed statements supporting its findings and calling for further investigation by the pension and law enforcement into the disturbing revelations. Other board members—lacking any financial training—indicated they had not even taken time to read the BFS report which was unprecedented both because it was authored by the nation’s leading pension forensic expert and commissioned by tens of thousands of members of the Ohio Retired Teachers Association who are participants in the plan.

The STRS staff written “self-evaluation” and presentation at the recent Board meeting initially appears to be an example of the type of well-orchestrated “pension theatre” to which state and local government pensions facing growing public criticism are resorting increasingly:

STRS staff spent hundreds of hours penning a lengthy hostile defense conceding nothing—no need for any improvement in management of the pension; financial vendors to the pension from all over the world were flown in to personally praise staff slothfulness; and a few board members chimed in periodically during the live-steamed meeting with seemingly rehearsed comments supporting STRS’s generous dealings with Wall Street. (Whether the majority of the board has even read the BFS report to this day is unclear. Only one member demonstrated knowledge of the report’s findings, asking probing questions during the meeting.) All seemed to be going well early-on for STRS until its consultants began offering information and opinions which conflicted not only with each another, but with their lavishly paying pension client. The pension and its hired experts could not even agree as to whether all investment fees paid to Wall Street, including hefty performance fees, are fees and, if so, whether these fees should be fully disclosed to pensioners and taxpayers.

However, it is important to note that the STRS presentation cannot properly be labeled “pension theatre” because STRS fails to meet the definition of a pension.

A pension is a comprehensively regulated, fully transparent, pool of assets prudently managed for the exclusive benefit of its participants to provide promised retirement benefits.

STRS is not a pension because:

• STRS is far from comprehensively regulated.

STRS refuses to be fully transparent to stakeholders.

• STRS does not prudently manage its assets.

• STRS is not managed the exclusive benefit of participants.

• STRS does not provide all of the benefits promised to workers.

Most importantly, the STRS analysis confirms or ignores (fails to dispute) all of the findings in the BFS report.

Read Benchmark Financial Services full response to STRS Ohio Staff "Analysis for Discussion with Board" at

August 25, 2021
Damschroder: Pension tension over big bucks bonus

By John Damschroder, Columnist
Fremont News Messenger

During the short public comment portion of a daylong STRS Board meeting Thursday, multiple retired teachers made it clear they consider their pension fund to be parasitic, feeding lavishly excessive compensation for staff and hired consultants while callously ignoring the teachers paying those bills.

Their message was sacrifice should be shared, through a salary freeze and elimination of bonuses, so long as STRS is unable to pay a COLA and requires a subsidy from current teachers.

Read this article online at

August 18, 2021
Damschroder: Where's the Auditor?

By John Damschroder, Columnist
Fremont News Messenger

"It’s the sort of thing the Auditor should have been all over the minute it hit the newspapers. It should have been the first item of new business on the Ohio Retirement Study Council agenda, and Wade Steen’s first email should have been to the auditor."

Read this article online at

August 15, 2021
HPA Urges STRS Ohio Board to Investigate Allegations

Members of Healthcare & Pension Advocates for STRS (HPA) sent a letter to the STRS Ohio Retirement Board regarding the forensic investigation of STRS Ohio conducted recently by Ted Siedle.

In the letter, HPA acknowledges the serious accusations in Siedle's report and urges the STRS Ohio Board to "investigate these allegations in a fully transparent manner and communicate openly with members about the findings so that they have vital information on the soundness and effectiveness of their pension system."

HPA represents the following organizations:

HPA to STRS Board 8.15.21.pdf

August 8, 2021
Reducing Risk and Restoring Our Pension Benefits
By Rudy Fichtenbaum

Currently STRS is taking a lot of risk and that risk has been increasing over time. STRS along with other pensions have shifted their asset allocation away from fixed income towards equities. A big part of the shift toward equities has been through alternative investments most of which is in the form of private equity or investing in hedge funds. At the end of the day, equity is equity, and we can see this when we look at the correlation between public equities, those traded on stock markets, and private equities, deals in the alternative space that have very high expenses. They are highly correlated - - they move up and down together. Historically stocks and bonds were seen as being uncorrelated so having a balanced portfolio was seen as a way of reducing risk.

One problem facing STRS and almost all other pensions is that returns on fixed income have been declining and so pensions have been looking for alternatives to fixed income, hence the development of “alternative investments.” But alternative investments, created by Wall Street, are just expensive forms of equity or involve making loans, which are equivalent to buying bonds (fixed income).

Investing is buying assets that generate cash flows. The assets that generate cash flows are stocks (equities – both public and private) generate dividends, bonds (government and corporate bonds and private loans) generate interest and real estate (commercial and residential). What gives an investment value is that it generates cash flows in the future and the prices of stocks, bonds and real estate are fundamentally related to the value of those cash flows. Some investors may also buy commodities, like oil futures, gold, art, cryptocurrencies etc. These are considered speculation (as opposed to investing) because they do not generate cash flows. The only way to make money on speculating is for prices of assets to go up. This means it is a zero-sum game i.e., whatever one person gains the other loses. There is no way to put a value on speculative assets because they do not generate cash flows in the future. The only other way to “make money” involves gambling. Gambling is making a bet that some assets will go

up or down. The problem with gambling is the odds are stacked in favor of the house.

With investing, because there is a stream of cash flows, the expected value of the assets should rise over time if the economy grows. How much they rise depends on the rate of growth in cash flows and the value that people put on those cash flows that they can receive in the future. The further out in the future that one receives cash flows the lower the value because it is better to have a dollar today than it is to have a dollar tomorrow.

Speculating has an expected value of zero. Think about flipping a coin. If the coin is fair, and you flip it a thousand times it will come up heads 50% of the time and tails the other 50% of the time. So, trying to make a living by guessing whether a coin will come up heads or tails is a fool’s errand. With gambling, the expected value is negative. Think about a dealer in a casino flipping the coin and each time the coin is flipped the casino charges a fee. If two people play the coin flipping game in a casino, statistically they will both lose because the expected value is zero minus the fee both pay to play.

Buying stocks, bonds, and real estate, can involve elements of investing, speculating, and gambling. Buying an index is nearly the purest form of investing because the fees are low, and you are buying the right to receive a future stream of cash flows. When you engage in active investing there is an element of speculating because you are guessing that one company or property will produce larger cash flows in the future and that people will put the same or possibly a greater value on those cash flows in the future. Think about the economy as being a series of bets on the future performance of various businesses. Betting that the economy will grow over a 20-year period in the future is like buying an index. But betting that you are smart enough to pick which companies and properties will be winners and losers in the future is a lot more like speculating. Unless you have information or some other edge that no one else has, the odds of consistently beating the market are vanishingly small. Moreover, when you consider that there are fees involved in active management and purchasing alternative investments, your purchases of these assets are a lot more like gambling in a casino run by Wall Street. The other major risk for STRS is a draw down that could ultimately cause the pension to be insolvent resulting from a significant decline in markets. Historically, markets have always had periods in which they go up followed by periods of decline. Right now, we are in the longest expansion in U.S. history and the longer it goes on the more likely we experience a significant downturn. (The downturn caused by COVID-19 was so short lived that it did not have a significant impact on the value of STRS’s assets.) Now you may be thinking that STRS has weathered many downturns so what’s the big deal. After all, STRS even survived the Great Recession. The difference is that in 2008 the net cash outflow (the difference between contributions and payments) was about $2 billion a year. Today the net cash outflow is about $4 billion per year.

Here is the way to understand the possibility of a drawdown. Suppose there is a 25% decline in STRS’s assets which are close to $100 billion. That would reduce assets to $75 billion. For STRS to get back to $100 billion it would need to increase its assets by 33% which would mean several consecutive years of earning double-digit returns. It would need to earn at least 5.3% just to stay at $75 billion. If the rate of return were 3.5% for the year assuming that payments are made at the beginning of the month and returns are received at the end of each month the pension would have $73.7 billion at the end of the year and so to get back to $100 billion would require a 36% increase. What is happening here is that even when the pension earns positive returns, they are not enough to cover the cash outflow so at the end of each month there is less to invest. The following year it will take at least 5.4% just to stay at $73.7 billion. So, it is easy to see how a pension like STRS could face a drawdown from which it cannot recover. The best way to mitigate the risk that STRS faces is to index its investments and find an alternative source of cash, one that does not come from investing, but comes from using its balance sheet and the advantages (the edge) it has over banks and hedge funds to earn fees. So instead of paying Wall Street, Wall Street will be paying us for providing liquidity which they need to survive. Our fees will be either negatively correlated or uncorrelated with equities and will allow STRS to significantly increase its earnings while reducing risk. By having a significant additional source of cash STRS will over time be able to lower its exposure to equities and have the cash needed to restore our COLA and reduce contributions and restore other benefit cuts for active members.

STRS is our pension, we paid for it, and it is time for the Board and the senior staff to recognize that at the end of the day the only reason the pension exists is to pay benefits to members.

August 1, 2021
Whistleblower Ted Siedle Talks His Latest Pension Investigation in Ohio and New Book "How to Steal A Lot of Money - Legally"

Siedle's discussion about his forensic investigations of STRS Ohio and OPERS begins at 17:00.

July 25, 2021
Ohio Pensioners May Hold The Keys To Finally Fixing America’s Struggling Public Pensions

By Edward Siedle
Forbes Contributor

Through a grassroots donation campaign that began late last year, the Ohio Retired Teachers Association (ORTA) engaged my firm to conduct an independent expert forensic review of the $90 billion-plus State Teachers Retirement System of Ohio. According to ORTA, the decision to engage in this project was driven by a lack of trust between retirees and those managing their pension system. My investigative findings, The High Cost of Secrecy were released June 2021 and were widely reported in NBC News, Bloomberg and local media. The purpose of the high-impact limited forensic review was to readily identify, at a reduced cost, deficiencies which would significantly improve investment management and performance results.

In Ohio, strong participant organizations, such as the Ohio Retired Teachers Association and social media, including Facebook groups like STRS Ohio Watchdogs, have played important roles in funding the forensic investigation, publicizing its findings and continuing to lobby for change. Strong participant organizations and social networks are critical to success.

I believe we are on the cusp of a participant-initiated public pension revolution. Count on Ohio to be the first win for participants.

Click here to read this article online.

July 22, 2021
Could Ohio's retired teachers see higher pension payouts? STRS management is focus of board infighting

By Laura A. Bischoff
The Columbus Dispatch

There is trouble in the board room at the State Teachers Retirement System of Ohio, a pension fund that oversees $94.5 billion invested for 500,000 Ohioans.

A faction led by board member Wade Steen is arguing that STRS investment staff miscalculated their performance bonus pay and that information is being withheld from board members.

The back-and-forth between factions is playing out in a series of terse letters and blog postings.

"As with your allegations of fraud, we remind you that allegations of staff misconduct are a serious matter and should not be made lightly," three board members wrote to Steen in June.

Steen also says that he knows of a way that STRS can reduce its investment fees, dramatically drop the required contribution rates, allow teachers to retire at younger ages and bring back the cost of living allowance.

Click here to read this article online.

July 21, 2021
Damschroder: Transformational or delusional, let the debate begin

A newly proposed investment strategy could help current and retired teachers

By John Damschroder
Fremont News-Messenger

Fremont native Wade Steen has detailed major problems and a possibly brilliant solution in a letter to fellow State Teachers Retirement System of Ohio Board members. Steen released a detailed explanation on how the STRS investment staff is alleged to have improperly secured $7.8 million in performance bonuses using false data. Steen further claims the STRS staff has blocked his ability to obtain information necessary as a pension fiduciary and he’s calling for the appointment of a personal lawyer by Ohio Attorney General Dave Yost to assist him in legal battles with STRS.

But easily the most consequential aspect of the Steen letter is his call for a special STRS Board meeting where he and newly elected board member Dr. Rudy Fichtenbaum will unveil an investment strategy to restore the cost-of-living adjustment (COLA) for retirees, cut the payroll deduction for active teachers from 14% to 4%, and lower the retirement age. 

Click here to read this article online.

July 21, 2021

"They took promised COLA benefits from workers and paid it to Wall Street in higher fees."

PODCAST: The Secret Wealth Transfer

Watchdog Ted Siedle is exposing one of the biggest Wall Street heists in American history.

Edward Siedle talks about his forensic investigation of STRS Ohio.

July 17, 2021
Second Ohio group jumps in with effort to review its state retirement system

By Jim Provance
The Blade, Toledo, Ohio

Even as an outside-funded, deep dive into Ohio teachers' retirement system continues, an effort is under way to do the same with the pension fund for most other government employees.

"There are certain uniquely positive features — including strong participant organizations and board members willing to break from the pack and speak out —with these funds that lead me to believe that these investigations could have very positive outcomes, outcomes that have not happened anywhere else in the United States," said Ted Siedle.

The former Securities Exchange Commission attorney, financial forensics investigator, and co-author of the book "Who Stole My Pension?" has already been hired by a group of about 1,000 retired teachers who've challenged decisions made by the State Teachers Retirement System.

Now a Kickstarter campaign is being launched to raise funds for a similar forensics audit of the Public Employees Retirement System.

Click here to read this article online.

Watchdogs-Steen July 14, 2021 Letter.pdf

July 14, 2021
STRS Board Member Wade Steen to Board Chair Walters: Hold special meeting to restore COLA and dramatically cut employee's contribution...

July 8, 2021
OEA and Forensic Audit of STRS Ohio 

Many of our supporters belong to the Ohio STRS Member Only Forum, a private Facebook group for members of STRS Ohio.

A letter was posted in the Forum recently, from OEA President Scott DiMauro to Local Presidents, Board of Directors, District Leaders, UniServ Leadership Council Chairs, OEA-R Advisory Council, and all OEA Staff.

In his letter, Mr. Di Mauro addresses the forensic audit of STRS Ohio conducted by Edward Siedle. For those of you who may not be aware, the Ohio Retired Teachers Association (ORTA) organized a fundraising campaign to raise $75,000 to hire Siedle to perform a forensic audit of STRS. Siedle released his preliminary report on June 7, 2021. You can find “The High Cost of Secrecy: Preliminary Findings of Forensic Investigation of State Teachers Retirement System of Ohio” on the ORTA website.

Watchdogs members will be pleased to read that OEA urges the STRS Ohio Board to “take the report seriously and fully investigate the claims” and “communicate openly with its members about the report.”

In response to Mr. DiMauro’s reference to “inflammatory and one-sided social media posts you may be seeing”, we want to assure our members that the mission of the STRS Ohio Watchdogs is to post reliable and fact-based information for Ohio’s legislators and taxpayers about STRS Ohio and our retirement benefits.

July 1, 2021
How Do We Bring Change to STRS?

By Rudy Fichtenbaum
STRS Ohio Board Member-Elect

The following is (in italics) a short excerpt from an email I received from an individual who I believe truly cares about our pension but feels that the tactics I am using, mainly being openly critical of senior staff and some Board members, is a mistake. What follows is a lightly edited response (mainly correcting a few typos which seem to be the bane of my existence).

“[name deleted]’s comments echo my concern with how your investment ideas are being promoted. Wade Steen posting an open letter on Facebook, that in essence called everyone at STRS a bunch of liars, is not helpful. While pleasing to the critics of STRS, your last sentence in an otherwise excellent report, has, in my opinion, a similar effect.”

“I know you are serious about exploring these investments ideas. To accomplish that, a change of focus may be necessary, concentrating on opening the minds of those who really matter - your fellow Board members - rather than forcing them into a defensive position that resists change.”

“I would like to see a full airing of these ideas, with fact-based pushback from the other side. I believe that sharp facts are more effective in changing minds than blunt-force name-calling. Donald Trump might disagree with that observation, but I’m sticking with it, even if only to maintain a little optimism about the country and STRS. Allow your “ends” to guide your approach, not simply justify your ‘means.’”

As an academic, I would much rather be arguing over facts. And frankly, I believe that I have put out more facts than most of the other people engaged in this “conversation”, including the STRS senior management staff. The staff have a tremendous information advantage and they have been unwilling to share that information. They also present misinformation and misrepresent certain facts. If one side plays dirty, withholding information and misrepresenting facts and uses appeals to authority as the main vehicle for making their arguments, then we end up where we are today. 

Honestly tell me if you were Wade Steen and were treated the way he was treated at the last Board meeting, not to mention having basic information that he requested as a fiduciary withheld, how would you react? If we want a debate in accordance with the Marquess of Queensberry rules, then the senior staff and the Board for that matter, are going to have to take the initiative because they hold the power. I would be happy if we had the same access to information and if the Board would be willing to hear from members. But from what I can see, they don’t really want to hear from members, and they are certainly not sharing information, at least not the kind of information that is needed to make an honest assessment of the performance of the pension fund.

Again, the fact that members had to pony up $75K when we already made our pension contributions, because members felt that STRS was hiding information and not be straight with members, is truly an insult. 

When you are the underdog, you must use all the tools at your disposal. By that I don’t mean lying or misrepresenting facts. But at this point we are involved in a political battle and that inevitably leads to questioning people’s motives, which I know is uncomfortable terrain. So, unless STRS senior staff want to change how they treat members and Board members who raise questions, those of us who want to get to the bottom of what has happened and how we can fix it are going to have to use all the tools at our disposal. And again, just so what I say is not misrepresented, I am not talking about lying, misrepresenting facts, or withholding evidence. If I make a mistake in the presentation of facts and it is pointed out to me, I am not afraid to own up to my mistakes and offer a correction. But beyond that my suggestion is STRS senior staff and Board members, who are standing in the way of trying to fix the pension, just need to put on their big boy pants. What is at stake here are the lives of members who depend on their STRS pension to pay their rent or mortgages, to buy food, to pay for medical bills, to visit their grandchildren and live a dignified life in retirement. 

Think about it this way. We are constantly told that we need to pay bonuses to attract talent otherwise people will leave. Well, that means the people who work investing our pension money have alternatives if they are not happy working at STRS. But members getting pensions have no other choices. They don’t have any other pensions, they are subject to the Windfall Elimination Provision if they get Social Security at all, and many cannot just go out and get a job. This is serious stuff and literally there are lives at stake.

June 29, 2021
Forensic Investigation Of Ohio Teachers’ Pension Reveals Widespread Failures And Mismanagement
By Edward Siedle, Contributor, Forbes

Earlier this month, the forensic investigation of the $90 billion-plus State Teachers Retirement System of Ohio commissioned by the Ohio Retired Teachers Association and performed by my firm, was completed. The damning preliminary findings have now been reported to Ohio legislators, regulators and law enforcement.

The report concluded the state pension has long abandoned transparency; legislative oversight of the pension has utterly failed; Wall Street has been permitted to pocket lavish fees without scrutiny; investment costs and performance may have been misrepresented; and failure to monitor conflicts may have undermined the integrity of the investment process, as billions that could have been used to pay retirement benefits promised to teachers have been squandered.

Read Siedle's article at

June 28, 2021
How We Can Restore the COLA and Reduce Member Contributions

Dr. Rudy Fichtenbaum, STRS Ohio Board Member-Elect

STRS needs to reduce its expenses and increase its returns without increasing market risks. In the most recent Board meeting, Governor appointed investment expert Wade Steen, indicated such a solution exists but he also told us that the senior management staff are preventing the Board from even discussing the solution. The solution that Mr. Steen alluded to would result in STRS earning an additional $4 billion per year. For perspective, $4 billion is more than the current employee (14%), employer (14%), and healthcare contributions- combined. It is easily enough money to restore the COLA for retirees and cut contributions for active employees and begin rolling back some of the other cuts that came with pension reform.

What is the proposed solution? Let’s think for a moment about banks, the building block of our financial system. What is a bank? A bank is a business that accepts deposits and makes loans. Pretty simple right? Traditionally banks made money by making loans and charging borrowers more in interest than they paid to depositors. When you make a loan, you are a “taker” or an “investor” who takes risk and hopes to make money when interest is paid on the loan. Banks can reduce their risk by selling the loans they make. Each time they make a loan they charge a small fee and when the loan is sold the bank has the money to make new loans. So today banks make most of their money not from the interest they charge on loans but from the fees of making loans. If a borrower defaults the bank is protected because they don’t own the loan. In this case the bank is acting as a “maker.”

STRS current investment strategy is to be a taker. The investment staff take risk by trading and investing in nontransparent alternative investments (hedge funds, private equity, and venture capital) and thus, implicitly believe they are smarter than Wall Street. The graphs below show the odds of beating the market.

Think about it this way, beating the market means that you are above average. In a zero-sum game, half will earn a gross return above the market and half will earn a gross return below the market. But investing is not free and once trading costs and investment expenses are deducted there is automatically less than a 50/50 chance of earning a return that is above average. If we were in Lake Woebegone things might be different, but we live in Ohio.

What is the alternative? Combining passive investing and being a maker allowing STRS to earn fees by using its balance sheet will dramatically increase returns and reduce risk. This is precisely what the Healthcare of Ontario Pension Plan has done for more than twenty years.

Unlike a bank, a pension has a permanent capital base which means there are no depositors who can withdraw their money and pensions are not subject to the same types of restrictions as banks when it comes to managing their balance sheet. This allows a pension to partner with banks as a maker and collect fees by helping banks better manage their balance sheet.

STRS has assets. To become a maker, STRS will exchange its risky assets like stocks for safe assets like Treasuries. STRS will then use a portion of the Treasuries to buy the rights to the returns (or losses) of an index (for example the S&P 500), which amounts to passive investing. STRS can then take the remaining Treasuries and exchange them with a bank for stocks the bank wants to get off its balance sheet for a fee. STRS will in effect be creating a warehouse for these stocks and can lend them out for additional fees. STRS will still get the interest from the Treasuries, and the bank continues to get the capital gains (losses) and dividends from the stocks. Each time the stocks come back they will be lent out again for another fee. So, because STRS will get the S&P 500 returns (or losses) plus the fees it earns for warehousing and the fees for lending its inventory, it will always be able to beat the market. This strategy, of being a maker and getting the benefits of passive investing, also lowers risk because fees, associated with warehousing operations, are negatively correlated with stock market returns.

Are there risks with this strategy? The two major risks are counterparty risk i.e., the bank you are dealing with goes bankrupt and operational risk. Counterparty risk can be managed by only engaging with banks that are ‘too big to fail’. Operational risk is keeping track of all the transactions, so you know who has the stocks from your warehouse. This type of risk can be mitigated using advanced technologies.

So why are STRS senior staff standing in the way of this solution that could restore the COLA, reduce member contributions, and potentially restore other pension cuts? The answer appears to be that senior management seems to care more about the well-being of the investment staff than it does about STRS members.

June 22, 2021
Ohio Legislative Oversight Of Five State Pensions Has Epically Failed

By Edward Siedle
Forbes Contributor

"The Ohio Retirement Study Council was created by the Ohio Legislature to provide legislative oversight of Ohio’s $200 billion-plus statewide public pension systems. For decades, it has epically failed to perform its limited statutorily-mandated duties."

Read Siedle's article on the Forbes website at

June 21, 2021
Rudy Fichtenbaum: I have never heard a Board meeting like the one I listened to Thursday!

For those of you who may not know, there is a coalition of stakeholder groups that aims to influence STRS decisions. It is called Healthcare and Pension Advocates of STRS or just "HPA." I've been representing the AAUP as part of HPA for more than a decade. Here is a message I sent to the group ahead of a special meeting that we're having today about the Ted Siedle report:

HPA members:

I have never heard a Board meeting like the one I listened to Thursday, and I have sat through many Board meetings for different organizations. I have never seen an organization where Board members cannot add items to a Board agenda. I can tell you that no University Board operates that way, union Boards do not operate that way at least not in the AAUP nor on the Executive Board of the Miami Valley AFL-CIO. It is part of the way that the staff try and control the agenda of the meeting because they are afraid. I will not speculate as to why they are afraid but I think that is a fact.

Voting on items as a group is certainly contrary to Robert’s rules unless a group of changes is common e.g., let’s change this word to another word throughout the document. But when voting on distinct items, any parliamentarian (and I have had the opportunity in AAUP to work with a professional parliamentarian) will tell you that you should have separate votes on items to allow members to vote one way on a particular item while voting another way on another item. Incidentally, in another life, I also served as President of the Faculty Senate at WSU twice, chaired almost all the major University-wide faculty committees and I was President of the National AAUP for more than 8 years, so I know a thing or two about running the meetings of deliberative bodies. When the question was raised about whether STRS follows Robert’s Rules of Order, we were informed that they use them as a guide. I am not sure what that means. Does it mean you used them when it is advantageous to those who are running the meeting to control the meeting but not use them when it might threaten their control? You either use Robert’s Rules or you don’t. Yes, I know the STRS Board is not required to follow Robert’s Rules, so no policy, regulation or law was broken. But there is a reason why organization use Robert’s Rules and that is because they ensure fairness, orderly meetings and promote democratic decision making. That part of the meeting was a total embarrassment. It is what I imagine meetings to be like in the Kremlin or in a Banana Republic. You can have any view you want as long as it is the view sanctioned by a dictator.

I am not sure why it is hard to find common ground on a set of facts. After all facts are just facts. Part of the problem is STRS staff has lots of facts that they are unwilling to share. I am not going to speculate as to why they will not share the information but it is a fact they will not share a great deal of information that would put us all on the same footing. Nevertheless I think there are facts we agree upon.

Our pension is the only public pension in the U.S. where the normal cost is less than member contributions. So active members are getting screwed. It is a fact that a significant number of retirees are very, very upset about the elimination of the COLA. They feel that they were promised a COLA when they made the decision to retire and now that they have made an irreversible decision, the rug was pulled out from under them. So far, I don’t think anyone will argue with the facts as I have stated them in this paragraph.

The pension has significant cash outflows and fixed contributions that can only be changed through legislative action. This along with some previously stated facts means that the pension is very vulnerable to a significant downturn in the market. Such a downturn could trigger an irreversible spiral down from which STRS could not recover ultimately leaving the pension insolvent. Checking in again on the facts, I don’t think any staff, current Board members or members would disagree, although many members do not understand the risk for the pension. Again, so far, I don’t think I have said anything controversial.

Given the investment strategy of STRS if the Board reduces risk, they will reduce returns and right now although 2021 has been a great year they cannot afford to reduce returns. There is also a lot of unmeasured and unmeasurable risk in the STRS portfolio. There is a lot of liquidity risk because of the significant part of the portfolio in alternatives and real estate. This last statement probably starts to border on a fact that some might not agree with but it doesn’t seem very controversial to me.

I think it is a fact, that STRS needs to increase its returns and I have heard several current board members and former board members make this statement and I have not heard any Board member or staff member disagree with that statement.  There are only two ways to increase returns, reduce investment expenses or other things equal increase returns (gross returns). At the end of day the pension needs more money. How am I doing so far?

It is also a fact that a proposal to increase returns, reduce expenses and reduce risk exists and the staff of STRS are aware of it. That is a fact. I have seen an email from an STRS staff member asking questions about how to implement this proposal from written to an employee of another pension has been implementing these strategies for years and I would be willing to produce a copy of that email if anyone doubts it. The email is exploring the possibility of STRS using liquidity monetization (LM) strategies to enhance STRS earnings. So, I will consider this a fact.

At yesterday’s Board meeting Wade Steen, the governor’s appointee said, “A solution exists to restore COLA and lower both employee and employer contributions.” That is additional evidence that at least some members of the Board know about LM. Steen goes on to say that “STRS senior staff have gone to great lengths to prevent the board from discussing this solution. The reason for this obstruction is likely because of the inherent conflicts of interest - the staff are unwilling to confess their performance failures and recommend a solution which jeopardizes their employment with STRS.” Now I think I have gotten into an area that will be controversial, because here Wade Steen is speculating about motives. But forgetting about motives, it is a fact, that there is a proposal that could be helpful, but it can’t get in front of the Board because that decision is controlled by the Chair and the senior management staff.

The fact that no Board members were willing to comment on Siedle’s report except for Wade Steen is deeply disturbing. Board members who spoke in response to Steen’s request sounded like school children giving excuses like my dog ate my homework, when trying to explain why they had not “had time to read the report carefully.”

When a sitting board member says that his information requests have been denied, how can the STRS staff say with a straight face that they are being transparent? The three items that Wade Steen mentions should have been given to him immediately (that’s my opinion, not a fact). If they are not being transparent, what are they trying to hide? (That’s just a question, not a fact or an opinion). When a sitting member of the Board of one of the largest pensions in the world says he has read the Siedle report and found it deeply disturbing and gives out the phone number of the FBI in a public meeting, I would say it is a fact that there is trouble in paradise.

If we are going to save the pension, we need help. At some point you either have to be part of the solution or you are part of the problem. I am hoping that HPA can be part of the solution.

Watchdogs-Steen-June-17-2021-Open Letter.pdf

June 17, 2021
Governor Appointed Board Member Wade Steen: Open Letter to STRS Ohio Stakeholders

"I have completely lost confidence in the staff's ability to invest money, and even worse, their willingness to tell us the truth about the results." - Wade Steen

June 13, 2021
Forensic Expert Edward Siedle Responds to STRS Ohio Rebuttal of High Cost of Secrecy Investigative Report

By Edward Siedle

As the nation’s leading expert in pension forensics, I would have liked to conclude in my report released last week, The High Cost of Secrecy, that the State Teachers Retirement System of Ohio is professionally-managed and the retirement security of those who depend upon the pension is assured.

Unfortunately, I could not then and cannot now. Nothing the pension has said to rebut my findings is remotely persuasive. In my opinion, STRS insiders and their Wall Street helpers either don’t know what they’re doing or, worse still, are fully aware their actions are not in the best interests of stakeholders but simply don’t care.

To recap:

There is only one reason to oppose transparency and embrace secrecy: Because you have something to hide.

STRS apparently believes it has plenty to hide. Over the past six months, the pension has failed to respond to the overwhelming majority of my requests for documents. Only the most mundane records have been released, in an effort to distract from the fact that all—100 percent—of the critical investment documents I requested detailing widespread industry abuses and potential violations of law have been withheld.

STRS disingenuously claims to have provided more than 800 documents and 22,000 pages in response to my records requests. In the words of economist and newly-elected STRS board member, Dr. Rudy Fichtenbaum: Claiming that you are being transparent by counting pages is absurd.Transparency is not merely about the quantity of information it is also about the quality of information.

Since commencement of my investigation, one board member I interviewed has resigned and two others have openly expressed their own frustrations obtaining information from the secretive pension. STRS isn’t even transparent with its own board!

There is only one reason to delay statutorily-mandated fiduciary audits year-after-year: Because you have no intention of curing the longstanding deficiencies you know the audits will expose.

There is only one reason to refuse to fully disclose all investment costs: Because the all-in fees the pension pays Wall Street are unjustifiable and far too high.

How to defend paying Wall Street $143 million for doing nothing?

Keep it secret.

There is only one reason to use bogus “actual” performance so-called “benchmarks” for the riskiest investments and mystery custom peer group comparisons: Because the true investment performance results are dismal.

There is only one reason to misrepresent to stakeholders that GIPS compliance verification for a pension which invests heavily in alternatives (that are not themselves GIPS compliant) provides any meaningful benefit: Because GIPS compliance verification presents some perceived public relations advantage to a pension widely distrusted. That is, to STRS, the appearance of integrity is more important than diligent oversight of investments.

There should be no reason to ignore external investment consultant conflicts of interest that may have cost STRS over $1 billion annually or approximately $20 billion over a ten-year period—an amount nearly equal to the under-funding of the pension. Yet—despite specific warnings dating back to 2006—compliance with conflicts of interest safeguards has never been enforced at STRS. You have paid the price— your COLA slashed and then outright eliminated—for this willful neglect.

You deserve better.

Later this week I will release my recommendations for action to hold those responsible for the mismanagement and billions in losses accountable. If your retirement security is important to you, prepare to join with others to take action.

Read this document online at

June 11, 2021
My Response to 'STRS Ohio Responds to Report on the Pension Fund'

By Rudy Fichtenbaum, STRS Ohio Board Member - Elect

I want to begin my comments by saying that it is apparent that many of us have a have a trust problem when it comes to STRS. Beyond that I want to make some general observations about STRS’s response to the Siedle report and also provide one more piece of specific evidence regarding STRS performance. This response is not a point-by-point examination of the response. I will leave that to others.

The general approach taken by the STRS staff in responding to Siedle’s report is not to provide real evidence but to use a basic fallacy that gets taught to every college student who takes a course in logic and that is the “appeal to authority.” The appeal to authority fallacy is making a statement that something is true or false because an expert says it is true or false. Something is true or false, not because an expert declares it to be true or false, but because there is evidence. The point of having an expert look at something is he or she is supposed to know exactly what evidence is needed and to have the expertise that is needed to look at the evidence, analyze the evidence and present the results. When experts present evidence it is generally peer reviewed and it is now common practice in scholarly journals to provide one’s data so that peers reviewing the evidence can check the work of experts when they make claims based on their analysis of data.

The STRS response is long on appeals to authority and short on evidence. Let me provide just a few examples to illustrate my point. "Independent review shows STRS Ohio’s 10-year return exceeds 88% of public fund peers, among the best over multiple time periods” How do we know this is true? Is it possible to independently verify the claim? The answer is no because the data used by experts is proprietary.

"ACA Group annually examines and verifies STRS Ohio investment performance reporting is in compliance with GIPS® standards.” They examine and verify. What exactly does that mean? All of you should listen to the exchange between Wade Steen, ACA and the STRS staff on this very point when he asked whether the returns that STRS were “audited”. If someone says I made $4 in the last two days because I sold $2 worth of goods today and $2 worth of goods yesterday that can be verified by hiring a Ph.D. in math and getting them to check that 2+2=4. But that is not really what is important. What we really want to know to evaluate the validity of the claim is whether the person making the claim actually sold $4 worth of goods over a two- day period.

Suppose I went to a doctor, and he/she ordered some tests, made a diagnosis and recommended a course of treatment. But I am concerned about the treatment and ask for a copy of the test results so I can get a second opinion. What if the doctor responds telling me, look I am an expert? I went to the best medical school in the country and last year my colleagues voted and gave me the doctor of the year award. You should just trust me. I won’t give you your test results because they are proprietary information. What’s happening here. This example uses a basic fallacy in logic, the “appeal to authority” in place of providing real evidence. I am the expert and so you should trust me, and I don’t have to give you real evidence.

Claiming that you are being transparent by counting pages is absurd. Transparency cannot be measured by counting pages. Again, anyone with just a high school education would know that if they made an information request and received 1 million pages with one word on each page, they would not be getting any useful information. Transparency is not merely about the quantity of information it is also about the quality of information. Transparency means that the signal to noise ratio is high enough that useful information can be obtained when information is transmitted.

Now I want to turn to one specific claim made in the STRS response and show why it is 1) not verifiable using publicly available information and 2) why it is misleading i.e., meant to deflect your attention away from the real issue. "Alternative investment performance of 12.17%, 11.68%, 10.99% and 8.46% over the past three-, five-, 10- and 20-year periods ending March 31, 2021, respectively, exceeded STRS Ohio’s total fund performance and have been additive to STRS Ohio’s total fund returns.”

First, how convenient to use a date of March 31, 2021, for which there is no data available to validate this claim. March of 2021 is FY2021, and that fiscal year is not over until June 30, 2021, and it will be months until we get the 2021 CAFR. But setting that aside for the moment, let me call your attention to page 13 in the 2020 and 2015 CAFRs which, shows 5-year returns by asset class.

The 5-year return for alternative investments for 2016-2020 is 6.66% and the total fund return is 6.97%. So, for this 5-year period it is not mathematically possible to make the statement that alternatives were additive to the total return. (This would be true even if we used the total return net, which was 6.77%). For the 5-year period from 2011-2015 the alternative investments return was 13.01% and the total return was 11.93%, so alternative returns were additive to the total fund return (total fund net is not reported in the 2015 CAFR). So at least one statement in the STRS response is not true that being the 5-year return is not additive to the total return. What about the 10-year return? Mathematically, that is possible but there is no way to verify that claim given the data in the CAFRs. In fact, there isn’t even a way to verify a 1-year total return given the data in the CAFR. The reason is that the CAFR gives returns for domestic equities, international equities, fixed income, real estate and alternative investments, but does not give returns for cash and short-term investments, which accounted for 2.6% of total investments in 2020. Moreover, if you take a weighted average of the returns using each asset class, where the weights are the percentages shown at the bottom of page 13 under investment distribution by fair value, the return is 2.70% not 3.14%. But we know the 2.7% is wrong because it assumes a 0% return for cash and short-term investments. What would the return on cash and short-term investments have to be to get a return of 3.14%? The answer is mathematically 16.93%. Clearly that is absurd. If STRS could earn that much on cash and short-term investments, we would not have an unfunded liability. So, there are lots of numbers, lots of information but there is no transparency because we cannot independently verify the claims being made in the CAFR.

Perhaps the more important point, however, is that the statement in the STRS response was a form of misdirection and is therefore misleading, because it is addressing the wrong question. The fundamental problem with the alternative investments is that from 2011-2015 they returned 13.01% and the alternative investment blended relative return objective (blended benchmark) was 18.19%. From 2016-2020 alternatives returned 6.66% and the alternative investment bended relative return objective (blended benchmark) was 9.97%. So, in both 5-year periods (2011-2015 and 2016-2020), alternatives underperformed their benchmarks by 3.31% and 5.18% respectively. So, while it is mathematically possible that they were additive over a 10-year period, the total return for the 10-years would have been significantly higher, if the alternative funds were invested passively. The claim that alternative investments are good for STRS would be like a coach in a post-game interview telling reporters that we had a terrible game in the first half and a terrible game in the second have but overall, we played a great game.

Higher returns would have increased the plans assets and reduced the unfunded liability and that is what matters when it comes to the ability of the pension to meet the promises that were made to members.

Rudy Fichtenbaum has been elected to the STRS Ohio Board. His term will begin September 1, 2021.

Read this document online at

June 10, 2021
STRS Ohio responds to report on the pension fund

Earlier this week, STRS Ohio received a report about the system’s investments, commissioned by Ohio Retired Teachers Association. Many of the conclusions in the report are offered with little support other than the author’s opinion. While the author is entitled to his opinions, STRS Ohio does not want the report to unnecessarily concern our retirees, stakeholders and other interested parties. As detailed below, STRS Ohio’s investments have achieved strong performance, with low costs and lower than average risk.

Read this document online at

June 9,2021
Private equity and hedge fund firms invested pension cash for retired Ohio teachers. Here's what happened.

By Gretchen Morgenson
NBC News

For more than 30 years, Dean Dennis and his wife, Patty, worked in the Cincinnati school system, paying into their pensions so they wouldn't have to worry about retirement. "We managed our money well. We had our plans for our future," Dennis said.

But the Dennis family's plans and those of thousands of other former educators and school system workers in Ohio have been upended. In 2017, the State Teachers Retirement System of Ohio, or STRS, pension plan eliminated an annual cost-of-living increase. Since then, recipients have had no increase in payments while prices have risen by 8 percent.

Read this story online at

June 9, 2021
John Damschroder: New pension study confirms our reporting

By John Damschroder
Fremont News-Messenger

Since 2016 I have been reporting facts in the state pension financial documents that contradict former Gov. John Kasich’s campaign-calculated claim that Ohio pensions are “rock solid.”  

The State Teachers Retirement System (STRS) defended Kasich’s premise, asserting in the News Messenger that CEM Benchmarking data shows them as a low-cost, high-performance, value-adding pension system.

Now comes Edward Siedle, the former SEC lawyer turned whistleblowing crusader, to say STRS is misleading citizens through the selective use of limited CEM data. The Ohio Retired Teachers Association (ORTA) commissioned a forensic audit — a limited, high impact, inspection of STRS — that produced a finding that fully disclosed CEM data shows the $279 million in fees STRS reports are actually at least $463.6 million.

Read this story online at

June 7, 2021
The High Cost of Secrecy

Key Findings: STRS has long abandoned transparency; legislative oversight of the pension has utterly failed; Wall Street has been permitted to pocket lavish fees without scrutiny; investment costs and performance may have been misrepresented; and failure to monitor conflicts may have undermined the integrity of the investment process, as billions that could have been used to pay retirement benefits promised to teachers have been squandered.

Preliminary Findings of Forensic Investigation of State Teachers Retirement System of Ohio

Commissioned by Ohio Retired Teachers Association (ORTA)

Benchmark Financial Services, Inc., June 2021

Here are some excerpts from the report regarding the COLA and increases in active teachers' contributions and years of service required for retirement.

In our opinion, a more accurate assessment would be that the alternatives have massively underperformed the Relative Return objectives across all periods. For example, over the last 10 years alternatives returned 9.79 percent vs. 14 percent for the Relative Return Objective; for the last 5 years alternatives returned 6.66 percent versus 9.97 percent. Use of the recommended Russell 3000 plus 500 basis points as the benchmark would reveal that since the 2006 fiduciary audit (not including the massive underperformance in the 5 years prior to the audit), the Alternatives have dramatically underperformed, 8.26 percent versus 11.91 percent.The alternatives underperformance losses for the period amount to $8.6 billion or $2.5 million per trading day for 14 years. Restoring the COLA benefit would cost less than $1 million ($890,000) per day. For additional perspective, total active teacher contributions since the 2006 Fiduciary Audit amount to approximately $18 billion. $8.6 billion alternative investment underperformance equates to $61,000 per retired teacher.

To put the hidden, unreported fees—alone—into context, they amount to $2.75 million per school day, and more than twice the $210 million required to fund STRS COLAs annually.

Assuming STRS pays fees of 2 percent on total unfunded commitments, this amounts to an annual waste of approximately $143 million - enough to restore the COLA to 2 percent.

Most objectionable was the loss of a promised Cost of Living Adjustment (COLA) in 2013 with no resumption in sight. (11) In 2013, STRS did not pay the annual COLA; in 2014, 2015 and 2016 the COLA was reduced from the promised 3 percent to 2 percent. In 2017, the COLA benefits were reduced to zero supposedly “to preserve the fiscal integrity of the retirement system.” With approximately $7 billion paid out in annual pension benefits, elimination of the 3 percent COLA saved the pension approximately $210 million annually. When pressed for answers by ORTA, STRS leadership has simply stated the pension will only consider providing any COLA after it has reached a funding level of 85 percent. The problem is, ORTA notes, in over 100 years of existence STRS has rarely been at funding level of 85 percent or above and has not been at such level in the past decade.  (11) STRS retirees were promised an annual cost of living increase (COLA) at the time of their retirement. This promise was also codified in Ohio law (ORC 3307.67).

At the same time that retirees were experiencing a loss of promised benefits, active teachers saw an increase of 40 percent in their contributions to STRS. Active teachers also witnessed an increase in the number of years required to receive full retirement benefits. These changes resulted in many teachers paying more, working longer, and not receiving the level of benefits previously promised. Finally, while benefits to retirees were slashed, active teachers were required to pay more and receive less, the STRS board voted to increase salaries and pay nearly $10 million in performance incentives for the STRS investment staff. The performance incentives have been paid annually, despite no clear benchmarks for earning these so-called “bonuses.”

June 3, 2021

Private Equity Slammed by Pensioners in Ohio Fund Report

By Neil Weinberg
Bloomberg LP

A report commissioned by the 18,400-member Ohio Retired Teachers Association says “billions have been squandered” by the State Teachers Retirement System of Ohio on fees and under-performance in the pension fund’s $14.3 billion alternative-investment portfolio, according to a draft seen by Bloomberg.

Read this article online at

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

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

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

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

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

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 ( ).  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". ( 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


John Damschroder's "Panda article" certainly caught my attention. Here it is, if you haven't already read it.

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. (see page 29, STRS invests at least $345,000,000 in Panda Power) (STRS Ohio is first Pension System Mentioned) (Risky Investment) (Panda goes bankrupt) (on the way to bankruptcy Panda invests in wrestling/daughter) (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.