Editorial: Lavish pay wrong
Toledo Blade Editorial Board Nov. 13, 2023
There is a Grand Canyon-sized gap between the benefits for State Teachers Retirement System investment staff and the pension beneficiaries they serve.
Retiree resentment will be the outcome of exorbitant raises averaging more than 17 percent to staff while retirees received a meager 1 percent cost of living adjustment.
The big raises average more than $32,000 because STRS investment staff is highly compensated with an average salary of $200,000.
The average annual bonus paid in September was more than $95,000.
At the top of the scale STRS Chief Investment Officer Matt Worley got an $82,816 raise to $465,816 base pay and a $287,729 bonus.By managing their funds using 91 staff members, STRS reported that it earned a return of 7.5 percent in 2022. Simple math suggests that the same money invested in a low-cost S&P 500 index fund would have earned 14.9 percent.
The STRS Board of Trustees has consistently approved bonuses totaling millions of dollars for achieving investment performance benchmarks that are ridiculously low.
If STRS investment staff does not outperform an index fund they’ve added no financial value and deserve no bonus. The STRS Board approved $11 million in bonuses for 2023.
STRS is seeking a 22-percent rise in pension contributions from school districts, which would cost taxpayers more than $500 million.
The Ohio Public Employees Retirement System and the Ohio Police & Fire Pension are also after big boosts in taxpayer support that would take the annual total to more than $1 billion (“Pension bailout sought,” Oct. 24).
State lawmakers have contributed to the looming pension disaster with legislation allowing the pension funds to invest in complex financial instruments that have elevated the importance of the staff, to the detriment of beneficiaries and taxpayers. The General Assembly should eliminate the possibility of bonuses before asking Ohioans to pay more into the pensions.
State Auditor Keith Faber has recommended as much.
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