Recently Allen Mendenhall & Dan Sutter published an article “Retirement at Risk: The Political Economy of Public Pension Governance” in the Journal of New Finance comparing STRS’s and OPERS’s reported returns and returns calculated using audited data. What follows is my review of the Mendenhall and Sutter article as it pertains to STRS.

"A preliminary injunction is hereby ISSUED, and it is ORDERED as follows that: Defendants (and those acting in concert with them) are preliminarily enjoined to HALT any implementation, enforcement, or any other action taken pursuant to, or in furtherance of, the amendments to R.C. 3307.05 and 3307.11 contained in H.B. 96." - Judge Carl A. Aveni, Franklin County Court of Common Pleas

As a massive pension fund hovering around $90 billion to $104 billion in assets during this period, even seemingly tiny basis-point underperformances translate into hundreds of millions of dollars.

This year the PBI faces continued controversy associated with the ‘Retirement at Risk’ paper. This paper alleges the returns to determine PBI are less than the verified or audited figures. STRS members want to know that the STRS staff are earning their bonus payments. Two actions would help to instill confidence in STRS.

Let me give you an example: the STRS actuary states there is $1.3 billion available for bonuses; a 2% COLA costs $ 0.8 billion, and the Board doesn’t provide a 2% COLA. How does ORTA explain that to our members?

"I have already reached out to both of the authors, and so I am going to be working on that issue, and I want either or both to communicate with Mr. Bernard and Retirement Study Council staff so that they can explain the methodology that allowed for that computation in the one column of Table 1. We've got to have Mr. Bernard, our staff, be able to reproduce those results." - Rep. Adam Bird, Chair, ORSC

"Retirement at Risk" lends academic support to concerns ORTA has raised for several years about STRS transparency, investment-return reporting and performance bonuses. It credits the ORTA-commissioned Benchmark investigation as part of the chain of events that brought these governance questions to the attention of state auditors and policymakers.

I recently scrolled through all of our blog posts since 2020 to see which one has received the most views. This one, posted on March 19, 2025, has received 7,034 views!

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