Retired teachers oppose $9M in STRS Ohio pension staff bonuses
Columbus Dispatch (OH)
A group of retirees is asking the State Teachers Retirement System of Ohio to reject a plan to pay $9.66 million in performance bonuses to investment staff.
"In the face of the worst inflation in 40 years, there's nothing more tone deaf and wrong than STRS paying nearly $10 million in bonuses as a reward for losing $3 billion last year. The STRS board should vote no on these bonuses," said Ohio Retired Teachers Association Director Robin Rayfield in a written statement.
The state's second largest public pension system is expected to consider the bonus pay at its meeting Thursday.
STRS spokesman Nick Treneff said bonus pay is part of a compensation package that helps the pension fund attract and retain talent. Performance bonuses are paid to about 100 employees who manage STRS' investments.
Bonuses are based on how STRS performs over one-year and five-year windows compared to benchmarks.
Although STRS lost money in the last fiscal year, it outperformed its benchmarks. STRS suffered a 3.61% loss while is peers lost 5.62%.
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STRS operates on a fiscal year that runs July 1 to June 30. Its total portfolio dropped from $98.1 billion on June 30, 2021 to $90.6 billion on June 30, 2022 - a $7.5 billion loss. But, Treneff said, the fund pays out about $7 billion in benefits each year and takes in $3 billion in contributions so even if its investment return were zero, the fund would drop by $4 billion.
The STRS board has been embroiled in fights over how to restore the cost of living allowance to retirees and how to best invest assets for the future.
STRS Ohio's 11-member board is a combination of unpaid elected and appointed trustees. After more than a year of turmoil and infighting, three newcomers beat three incumbents for board seats in May.
Ohio teachers don't contribute to Social Security so STRS is their main pension.