Benchmark Financial Services Response to STRS Ohio Staff “Analysis for Discussion with Board” at Aug

Benchmark Financial Services Response to STRS Ohio Staff “Analysis for Discussion with Board” at August 19, 2021 Meeting

Fully two and a half months after Benchmark Financial Services released a report entitled “The High Cost of Secrecy: Preliminary Findings of Forensic Investigation of the State Teachers Retirement System of Ohio,” the staff of STRS finally prepared an analysis of the BFS report “for discussion at the STRS Board meeting” on August 19, 2021. While the long-overdue staff analysis is misleadingly titled, STRS Ohio Response to BFS Report, we note with great emphasis it is neither an official response of the pension nor its board. It is simply a defense of pension staff, crafted by staff, with the assistance of its paid consultants. Thus, whether any pension board members even agree with the staff is unclear, especially since the staff strategically only provided the board its analysis days before the meeting.

Indeed, immediately following release of the BFS report months ago, one sitting board member and another member-elect—both unique in possessing financial expertise—issued detailed statements supporting its findings and calling for further investigation by the pension and law enforcement into the disturbing revelations. Other board members—lacking any financial training—indicated they had not even taken time to read the BFS report which was unprecedented both because it was authored by the nation’s leading pension forensic expert and commissioned by tens of thousands of members of the Ohio Retired Teachers Association who are participants in the plan.

The STRS staff written “self-evaluation” and presentation at the recent Board meeting initially appears to be an example of the type of well-orchestrated “pension theatre” to which state and local government pensions facing growing public criticism are resorting increasingly:

STRS staff spent hundreds of hours penning a lengthy hostile defense conceding nothing—no need for any improvement in management of the pension; financial vendors to the pension from all over the world were flown in to personally praise staff slothfulness; and a few board members chimed in periodically during the live-steamed meeting with seemingly rehearsed comments supporting STRS’s generous dealings with Wall Street. (Whether the majority of the board has even read the BFS report to this day is unclear. Only one member demonstrated knowledge of the report’s findings, asking probing questions during the meeting.) All seemed to be going well early-on for STRS until its consultants began offering information and opinions which conflicted not only with each another, but with their lavishly paying pension client. The pension and its hired experts could not even agree as to whether all investment fees paid to Wall Street, including hefty performance fees, are fees and, if so, whether these fees should be fully disclosed to pensioners and taxpayers.

However, it is important to note that the STRS presentation cannot properly be labeled “pension theatre” because STRS fails to meet the definition of a pension.

A pension is a comprehensively regulated, fully transparent, pool of assets prudently managed for the exclusive benefit of its participants to provide promised retirement benefits.

STRS is not a pension because:

• STRS is far from comprehensively regulated.

• STRS refuses to be fully transparent to stakeholders.

• STRS does not prudently manage its assets.

• STRS is not managed the exclusive benefit of participants.

• STRS does not provide all of the benefits promised to workers.

Most importantly, the STRS analysis confirms or ignores (fails to dispute) all of the findings in the BFS report.

Read Benchmark Financial Services full response to STRS Ohio Staff "Analysis for Discussion with Board" at https://drive.google.com/file/d/1JRHbgK7MUlN6fYZazZVkrwsq3PWRKo2F/view?usp=sharing