Ohio retired teacher group wants $78.4 billion pension system audited

State Teachers Retirement System of Ohio is the second largest public pension systems in the state.
State Teachers Retirement System of Ohio is the second largest public pension systems in the state.

Credit: Laura A. Bischoff

Credit: Laura A. Bischoff

A coalition of retired teachers raised $75,000 to hire an outside auditor to comb through the books of the State Teachers Retirement System of Ohio.

The Ohio Association of Retired Teachers will hire Edward Siedle, a former Securities and Exchange Commission attorney, to conduct a forensic audit of STRS.

ORTA member Dean Dennis, a retired teacher, said Siedle will examine STRS business practices, fees and bonuses paid to money managers.

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“They are so arrogant in their operation that they’re not going to get away with it anymore,” Dennis said.

ORTA Director Robin Rayfield said, “We just don’t trust what they’re telling us.”

In 2017, STRS trustees eliminated the cost of living allowances for retirees but pledged to re-visit the decision within five years.

STRS spokesman Nick Treneff said state law requires each pension system undergo a fiduciary audit every 10 years, which STRS will begin this year. This audit will give a critical review of the system’s business practices, structure and organization. Separately, STRS will undergo an actuarial audit this year.

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Treneff said STRS has other review mechanisms: an asset-liability study, an actuarial experience review, STRS staff and outside investment consultant analyses. The pension system measures its performance against how other similarly situated funds do. And the system faces oversight from the Ohio Retirement Study Council, state auditor and state treasurer.

STRS has $78.4 billion invested for its 324,000 members, according to its most recent comprehensive annual financial report. In-house staff manage about 70% of the portfolio.

Like in other states, Ohio’s five public pensions are defined benefits systems. The pension benefit is based on age, years of service and final average salary, and it’s guaranteed. Defined contribution plans, such as 401(k) funds, are more common in the private sector.

Public employees in Ohio do not participate in Social Security.

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