Retired Ohio teachers angry at pension fund investments and six-figure salaries

COLUMBUS, Ohio (WCMH) — After an oversight committee failed to audit Ohio’s retirement fund for teachers for 16 years, a group of retirees decided to take matters into their own hands. .

Amid accusations of financial mismanagement and anger over the state’s teacher retirement system’s elimination of a “guaranteed” 3% annual cost-of-living allowance, the Ohio Retired Teachers Association has pooled its money to pay for a forensic audit of the $98 billion pension fund. .

Dean Dennis, a member of the Ohio Retired Teachers Association who founded a “watchdog” website engaged in tracking STRS, said retirees had every right to be angry.

“I mean, their hair is on fire, to be honest,” he said.

Charged with leading the STRS investigation was Ed Siedle, an expert in forensic pension auditing with a best-selling book titled “Who Stole My Pension?” He said he identified “serious deficiencies” in the pension fund‘s finances.

Below: Robert McFee’s full conversation with NBC4’s Colleen Marshall.

“Retirement money was wasted, there were all kinds of investments that raised serious questions, and the fees that retirement was paying were extremely high,” he said.

Wade Steen, an auditor who sits on the STRS board, corroborated Siedle’s findings and said he wasn’t sure where the pension fund’s money was going – or why the market recorded averaged a 15% rate of return over the past decade, but the STRS investment team averaged just 6 percent.

If the STRS continues to not “get the job done,” Steen said changes need to be made, comparing it to the Ohio State football team.

“I think we’ve seen coaches who haven’t done the job, and [coach] Ryan Day and Ohio State made some changes there — maybe it’s time to make some changes here,” Steen said.

While about 150,000 retired Ohio teachers are demanding answers about the lack of a COLA, Seidle said STRS staffers are earning six-figure salaries.

“STRS has an investment staff that is richly compensated with bonuses well above what the private sector in Columbus, or anywhere in Ohio, would pay,” he said.

Of the ten highest-paid employees in Ohio’s five public retirement systems, eight work for the STRS, according to the Ohio Checkbook.

In 2020, STRS’ highest paid employee – a regional manager – earned a salary of $294,550 and a bonus that doubled his salary for a total compensation of $587,554. The average teacher salary in Ohio is $61,406.

However, STRS board chairman Robert McFee, who teaches in Cleveland, said salaries for the pension fund’s professional investors are justified and should be competitive.

“Our investment team is made up of incredible, hardworking and dedicated professionals,” he said. “And at STRS, we do a compensation survey every two years to make sure they’re being paid adequately for their service.”

Through investment in internal pension fund assets, McFee said STRS saved Ohio teachers $117 million. The fund – which currently sits at an 87% funded ratio – had a 48% risk of falling below a 50% funded threshold just five years ago, McFee said. Now that risk has been reduced to 16%.

“We outperform 90% of public pension funds in the country,” he said. “We’re one of the best performing public pension funds, so I don’t know what critics are saying we’re underperforming – but I don’t think that’s an accurate description.”

Wright State economics professor Rudy Fichtenbaum, who sits on the STRS board, questions the pension fund’s investments — some of which he says are outsourced to Wall Street.

“Especially for what I consider to be very risky investments, basically these black box type investments in private equity. They are illiquid investments and they are very risky,” Fichtenbaum said.

Retired and active teachers expressed their frustrations in two Facebook groups, with 30,000 members, to demand the restoration of a COLA they had been promised.

Dennis is one of them, and he said STRS board members failed in their fiduciary responsibilities to retired teachers, placating STRS staff rather than serving teachers at the school. ‘Ohio.

“I hadn’t expected this. I worked 35 years, my wife worked 35 years,” he said. “We did everything right with our money, and now it has just been stolen from us.”

Dolores W. Simon