![Protesters outside STRS office](https://www.wright.edu/sites/www.wright.edu/files/styles/main_content_full_width/public/uploads/2021/Jul/article/STRS-COLA.png?itok=CfqtJ6NP)
Excerpt from Forbes
Contributed by Edward Siedle
Earlier this month, the forensic investigation of the $90 billion-plus State Teachers Retirement System of Ohio commissioned by the Ohio Retired Teachers Association and performed by my firm, was completed. The damning preliminary findings have now been reported to Ohio legislators, regulators and law enforcement.
The report concluded the state pension has long abandoned transparency; legislative oversight of the pension has utterly failed; Wall Street has been permitted to pocket lavish fees without scrutiny; investment costs and performance may have been misrepresented; and failure to monitor conflicts may have undermined the integrity of the investment process, as billions that could have been used to pay retirement benefits promised to teachers have been squandered.
Within days of the forensic report’s release, STRS staff hastily penned a response which cited the many experts the pension pays handsomely for guidance, even as it failed to address any of the serious deficiencies noted. For example, the staff did not dispute that a fiduciary performance audit and an actuarial audit of the pension had not been completed in the past 10 years—as required under applicable law—and the two audits were already 5 years overdue. No defense was offered for paying $143 million in investment fees to costly private equity managers on committed, uninvested capital—money for doing nothing. The fact that STRS apparently does not monitor all the investment fees it pays to Wall Street for reasonableness, or external investment consultant conflicts of interest consistent with its fiduciary duties, was ignored.
While STRS staff was quick to broadly reassure pension stakeholders all was kosher at the pension, the majority of the pension board stated at the most recent June meeting they were not prepared to discuss the report because they had not had enough time to even read it.
I’m sorry, but it’s not like 128-page forensic expert reports of $90 billion-plus pensions, commissioned by thousands of stakeholders happen everyday. You’d think all board members would have immediately made time to at least read the report—especially before permitting staff to publicly respond on their behalf.