COLUMBUS, Ohio — The member who resigned from Ohio's chaotic teachers' pension board differed from reform-minded leaders, sharing concerns about giving billions of dollars to an"illegitimate" investment firm.
In short,"reformers" want to switch to index funding, while"status quo" individuals want to keep actively managing the funds."My resignation is happening at the best time that it could happen," Foreman told me. The other major concern he had, that the reformers are focused on fixing, was the lack of cost of living adjustments, or COLAs. They were suspended for more than 150,000 retired Ohio teachers for five years starting in 2017. In 2023, STRS approved a 1% COLA to eligible retirees.
Steen and Fichtenbaum"seek to steer" as much as 70% of current STRS assets, which is $65 billion, to a"shell company" that has"backdoor ties" to the members, Yost argued. "The mention of $65 billion is patently false," Steen said at a board meeting in May."That was never proposed by me, never proposed by any other board member."
Case Western Reserve University business law professor Eric Chaffee says the reformers' answers are questionable and understands why Yost is investigating. They couldn’t impress the board members, mainly because of their lack of experience and also the fact that QED was not registered as a broker-dealer or investment adviser. The men also didn't own the technology to"facilitate the strategy," the documents say.
"I do rely on investment staff, their decisions," Foreman said."If I didn't, why would we have an investment staff?" As of the end of May, the fund had a market value of about $95 billion — with $8 billion in real estate. Reformers like Foreman want STRS to get rid of their out-of-state real estate investments so the fund can provide COLAs for retirees — but he also raises concerns about STRS' so-called opulence.
Educators complain that this money could be going toward giving retirees a COLA, but STRS staff argue that the building is pennies in comparison to how much it would cost to provide a larger living adjustment.