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'A lot of unhappiness': State Teachers Retirement System board hears concerns about bonuses, future

By Debbie Rogers, The Blade Dec. 6, 2023

BOWLING GREEN — The future of the State Teachers Retirement System, its present management, and alleged past mistakes were discussed at a town hall meeting.

More than 100 people packed the Simpson Garden Building for a presentation Tuesday by the board, which has been under scrutiny for giving $10 million in bonuses to investment associates but little increases to retired teachers.

Stephen Seagrave, president-elect for Ohio Retirement for Teachers Association, came from Delta, Ohio, to speak to the board.

“There’s a lot of active and retired teachers who are at the short end of the stick because of the management of STRS,” he said before the meeting started. “There’s a lot of unhappiness.”

Much of the angst stems from when the STRS eliminated annual cost-of- living increases and changed the full retirement years of service from 30 to 35, Mr. Seagrave said.

In the meantime, bonuses continue to be paid to the investment team, he said.

“STRS sets goals on investing and then pays bonuses, which sounds reasonable. But if you set your goal at 7 percent when the market is doing 12 percent, then you end up rewarding people for failure,” Mr. Seagrave said. “And the bonuses given last summer? I mean, they had one person get

a bonus of $232,000.”

Lynn Hoover, acting executive director, said bonuses are paid to eligible investment associates, not all staff. Those associates were paid $10 million in bonuses in 2022 and $9 million in bonuses in 2023, she said.

The STRS board has studied hiring money managers instead of the associates, Ms. Hoover said.

“We would spend $130 million per year — more — if we hired Wall Street managers,” she said. “There’s no free lunch around investment management.”

Ms. Hoover said it is unfair to look at the successful years of the stock market but not the unsuccessful ones.

“If I would have invested in the S&P 500 during the ’08, ’09 years, it would have been catastrophic,” she said. “Prudent investing is to be well diversified.”

Ms. Hoover gave an overview of the STRS, beginning with its successes in the 1990s.

“We wish we could have markets like this all the time. The markets were really steadily rising. We got all the way up to 97.9 percent in 2000,” she said. “That’s almost 100 percent funded.”

The next 10 years had two significant market declines, Ms. Hoover said.“We were at 55 percent funded, which is honestly a pretty scary state,” she said, adding that there were benefit cuts and pension reform.

It is 80 percent funded today.

Ms. Hoover’s presentation was interrupted by a woman in the back of the room.

“Why do the people in Columbus get raises and the teachers don’t get any?” she asked.

Many in the audience were also concerned about a proposal to ask the school districts/employers for more contributions to STRS. The current contribution is 14 percent.

“That increase on employer contributions is inevitably going to affect active teachers’ abilities to negotiate for higher annual raises,” said Doug Kollman of Perrysburg.

Dale Price, chairman of the board and a Toledo Public Schools teacher, said a larger contribution from employers could allow STRS to lower the retirement age.

“So older teachers like me will retire. When I retire, they can hire three brand new teachers to replace me. And that’s where the districts are going to save money,” Mr. Price said.

Don Christie, executive director of human resources with Perrysburg Schools, disagreed.

“If we have to give more as a district, we will not be able to hire those teachers, even if they reduce the age down,” he said, adding that the pool of teachers is also decreasing. “As I’m recruiting teachers, the number of teachers coming in now — for a high school science teacher, I might get five applicants."

“And we’re a destination district in the state of Ohio. I can’t imagine being in a rural district,” Mr. Christie added.

Joe Stockner of Perrysburg retired from Bowling Green Schools 37 years ago. He lamented the seven years that retired Ohio teachers went without a cost-of-living adjustment. A 3 percent cost-of-living raise was given in 2022, and a 1 percent increase was given this year.

“Well, bully, bully,” Mr. Stockner said. “COLA has not kept ip."

About $6 billion in total pension benefits are paid annually in Ohio, Ms. Hoover said. There are 175,032 active members and 156,511 STRS retirees and beneficiaries.

Wood County has 3,271 active members and 1,983 benefit recipients, receiving $100 million.

Mr. Price commented on the absence of Executive Director Bill Neville. The Ohio Attorney General’s Office received an anonymous complaint about Mr. Neville, and outside legal counsel advised the STRS board to place him on administrative leave, he said.

“The investigation is being conducted by an outside law firm, and other than that, I have no information on anything taking place,” Mr. Price said.

Dan Minnich, chief communication officer for STRS Ohio, said this was the sixth traveling meeting the board has had this year.

Legislation about employers contributing more to STRS has not been introduced yet, he said.



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