Let’s reflect on the current state of affairs. While progress is being made, active teachers still have the worst, or one of the worst, normal costs for their contributions in the United States, and retired teachers are perhaps the only group of public employees without any guaranteed inflation protection.
Members are in this predicament due to legislative neglect, STRS staff mismanagement, and a lack of staff oversight by prior boards.
However, I do believe there is a silver lining ahead of us. Our current board seems to be working towards transparency, moving our asset allocation into more indexed investments while moving away from PE investments which are fraught with hidden fees and non-disclosure agreements. Hopefully, our Board will also concentrate on better staff supervision. In my opinion, one department, in particular, has failed the board and its members.
A critical component ahead of us will be the selection of the next STRS Executive Director. That person must be aligned with the philosophy trying to beat the market is foolish and be an advocate of indexed investments. We don’t need any more bad press. They must be aware that saving 50 basis points in investment fees on a 90 billion pension captures $13.5 billion, excluding interest, over a 30-year funding period. This adds up to the cost of a permanent 2% COLA. The next person must also understand that they report to our Board and must be approachable. Our next hire must put the interests of members ahead of their staff. Lastly, they cannot lose control of their staff or support any vindictive behavior toward board members who are only trying to improve our pension system.
It's time for all of us to start pulling in the same direction and take care of our members who spend all of their working lives for the good of Ohio. We must move towards the day when our members agree that we are members of a top-quartile pension system instead of hearing it from the staff and their contracted services.
Dean Dennis, Chair ORTA Executive Committee
December 12, 2024