Whether you’re a retired teacher, an active educator, or an Ohioan concerned about public education and fiscal responsibility, get ready for an episode that untangles complicated pension jargon into everyday realities—and sounds the alarm on one of the most high-stakes financial battles quietly shaping Ohio’s future.

Welcome to the inaugural episode of Just the Facts Ohio! In this premiere, host Richele O’Connor sits down with Dr. Rudy Fichtenbaum, Professor Emeritus of Economics at Wright State University and board chair of the Ohio State Teachers Retirement System (STRS). With over 500,000 Ohio teachers counting on STRS for their retirement security, Dr. Fichtenbaum pulls back the curtain on why he believes Ohio educators are facing the worst retirement deal in the country.

In this wide-ranging and illuminating conversation, Dr. Fichtenbaum breaks down how inflation, stagnant cost-of-living adjustments (COLA), and a system designed with fixed employer contributions are eroding teachers’ purchasing power. He describes the internal drama and legal battles rocking the STRS board, the contentious debate over investment strategies and staff bonuses, and how political maneuvering threatens the voice of teachers in their own retirement system.

Beyond the headlines, Rudy highlights the real-life impact these policy decisions have on the livelihoods of retired educators, and offers a clear-eyed look at what the legislature, the STRS board, and teachers themselves can do to secure a fairer future.

Moments

00:00 "Governor's Board Reappointments Controversy"

06:28 Investment Impact on Retirement COLA

09:26 Revised Investment Benchmark Standards

13:17 "Midnight Massacre Amendment Controversy"

14:25 Pension Investment Strategies: In-house vs. Outsourcing

17:50 Inconsistent Pension Performance Metrics

21:36 Pension Liabilities as Mortgage Analogy

25:02 Pension Shortfall: $300 Million Monthly Gap

29:20 Teacher Pension Funding Challenges

33:35 Pension Contributions: Fixed vs. Variable

37:15 Mobilizing Community Engagement

39:22 Progress Made Amid Fiduciary Constraints

40:59 Consensus Challenges in Decision-Making

45:12 Board Constraints on Bonus Decisions

48:51 STRS Fiduciary Audit Conflict

52:38 "Pension Concerns, Lawsuit Response"

Here are three key takeaways every Ohio educator (and anyone who cares about strong public education) should know:

🔹 Purchasing power for retired educators is plummeting. Since 2017, the purchasing power of STRS retirees has declined by 32% due to insufficient cost-of-living adjustments (COLAs). With rising inflation and stagnant pension payments, many retired teachers are struggling to keep up with basic expenses.

🔹 Employer contributions are shockingly low and haven’t changed in decades. While Ohio teachers’ contributions have increased over the years, the employer's share has remained flat for 38 years—making it one of the lowest in the country. This is particularly problematic since teachers in Ohio do not participate in Social Security, relying exclusively on their pensions.

🔹 Board structure changes and lawsuits are disrupting governance. There’s ongoing turmoil around STRS board reform, including board member removals and reinstatements, lawsuits alleging breach of fiduciary duty, and new laws threatening to reduce the number of elected teacher representatives on the board. These changes raise major concerns about preserving teachers’ voices and long-term pension stability.

Huge thanks to Dr. Rudy Fichtenbaum for shedding light on these critical issues. If you care about the future of education in Ohio, now’s the time to get informed and get involved!

Articles of interest

https://www.news5cleveland.com/news/politics/ohio-politics/ohio-educators-file-lawsuit-against-state-for-removing-them-from-retired-teachers-pension-fund-board

https://www.orta.org/post/it-is-so-ordered-ohio-attorney-general-dave-yost-v-wade-steen-and-rudy-fichtenbaum

Copyright 2025 Just The Facts Ohio

Mentioned in this episode:

Disclaimer

The views expressed in this podcast are solely those of the host and guests, and do not necessarily reflect the official policy or position of any agency or company.

Welcome to Just the Facts Ohio, where facts provide the basis of the stories we believe you need to hear. This is Richele O'Connor. I'm your host and along with producer Brett Johnson Here at Circle270 Media, we are thrilled to have as our very first guest on this inaugural podcast, Dr. Rudy Fichtenbaum, Professor Emeritus of Economics at the Wright State University. Ha ha. Welcome, Rudy, and thanks for joining us today.

Oh, thank you. It's a pleasure to be here with you.

Well, Rudy and I taught together for a lot of years and as a teacher educator, I have to start by stating my objective. And my objective is that the reader will understand why you, Rudy, believe that Ohio teachers are getting the worst deal in the country. Hmm. Sounds very nefarious, doesn't it? All right, so as is customary on this podcast, we will start by listing pertinent facts. The facts we believe help us to tell the story. 1. There are over 500,000 teachers who are members of the Ohio State teachers Retirement System. 2.

The pension fund's fiduciary net position is valued at 96.3. Since 2017, the purchasing power of STRS retirees has declined by 32% due to insufficient cost of living adjustments to their pensions. 4. In 2021, you, Rudy, were elected to the STRS board, being one of 11 members, seven of whom are teachers, the other four being designated appointees. You still continue to serve and are now board chair. Since then, so called reform candidates such as yourself have been elected so that there's a majority of reform candidates on the board. 5. Also on the board is one of the four appointed members, Wade Steen, an original Governor Kasich appointee.

Governor DeWine reappointed Wade Stein to the board as his designated investment expert in 2026. Governor Devoine removed Wade Steen from the board in 2023. Number seven, Wade Steen, whose term recently expired, was officially reinstated to the STRS board in April of 2024 by order of the 10th District Court of Appeals which ruled that Governor DeWine had improperly removed him. 8. The last interesting fact in this twisted tale of one Rudy Fichtenbaum and his service to STRS is that the trial of the Attorney General versus Wade Stein and you is scheduled to begin on October 27, 2025, as he has charged you and Wade with breaching your fiduciary responsibilities. All right, well, if I didn't know better, I think this was an episode of the Sopranos with all the bad guys going after the good guys and so on. But we're talking about a large number of Ohioans and I'm one of those half a millions. And that's a lot of money.

And we have a situation of lawsuits, unrest, fighting about investments. And this isn't quite what you had signed up for when you ran in 2021, is it?

Well, no, but I mean, to some degree, you know, issues about how STRS was investing was an issue that I did raise when I ran for the board because I have been and continue to be an advocate for more passive investing and. But yes, all of the other kind of drama that has emerged here. Yeah. Was not something that I was really expecting.

If we can break this down a little bit more and unpack it. Let's take the first part about the declining purchase and power. How is it that, like me, I've been retired since 2015 and you said since 2017 this has occurred. I've lost 32% of my purchasing power. Can you explain that?

Yeah. I mean, when inflation goes up and your income stays the same, your purchasing power goes down, things get more expensive, but you still have the same amount of income. And so therefore you can't buy as much. Now we have. One of the things that the reformers have done is to. We have had, I think, three cost of living raises. I think one was 3%, one was 1%. And then I think we also had an extra payment in lieu of a cost of living increase.

What we've developed is something called a sustainable benefits policy where we have been working to try and restore some of the benefits that were cut in 2012. But it's important to recognize that even before the COLA was eliminated in 2017, STRS's cola was never a compounding cola. And so even with the cola, you'd be losing purchasing power. But now, of course, obviously, without any COLA or without any regular permanent cola, the prices of the things that we have to buy keep going up and the payments that we're getting are essentially pretty much fixed.

So the sustainable benefit policy doesn't really help or it just is a short term band aid.

It does, but it totally dependent on our investment performance. So if we have good investment performance, then it creates a budget that the board can either use to try and reduce the unfunded liability or it can offer some cost of living increase. But that's a cost of living increase that's not guaranteed to any of the members who are currently working. This is only for retirees. A permanent ongoing COLA would benefit not only the people who are retired now, but it would Also benefit all of the people who are working, as well as people who haven't even started teaching yet, but will become teachers in the future.

Wow. So how many of those half a million members are retired teachers?

I think it's about 120,000. And then I think there's a little bit more active members, and then there's what are called inactive members, and those are people who taught for a while, have some money in the system, but aren't currently employed as teachers. So it's kind of three groups, but you know, the two big ones and the ones who, you know, are the active members who are currently teaching and the retirees.

So these disappearing colas that you'd mentioned, those are just one of the reasons you ran. And would you like to talk about some of the other factors that were the source of your motivation to run?

Yeah, I mean, I thought, you know, there was a need for greater transparency. And just the entire way that, you know, the board operated and communicated with members, I thought, you know, could really be improved. And also the way that we evaluate the performance of the investment staff, you know, the issue of what is technically called performance based incentives. Although if you look out in the, you know, on Facebook or something, you'll see people talk about bonuses, which goes really only to the investment staff.

Right.

And it is given out based on how they perform relative to what's known as a benchmark, which has been a source of controversy as well about whether we have been using the right benchmarks. Benchmarks that would measure, in a sense, what we could have earned had we invested passively. Because passive investing is very inexpensive. And so if you cannot outperform what you would get investing passively, there's no reason to be engaged in active, what's called active investing. And so how you judge that depends on what you use to measure that passive performance. And I think, you know, the. Recently the board approved some new benchmarks, and I believe that, you know, they're better than what we had before. I still think there's room for improvement, but I think that's definitely, you know, a positive step that we've taken.

And I think also, you know, increasing transparency, you know, is something that, you know, we have been, I think, working on and, you know, communicating in a way with our members that is, you know, not spin. Yeah, I think that, you know, just kind of laying out what the facts are.

There's been more involvement, I think. And do the elections show that? I mean, I haven't looked at that, but the numbers of people participating in Elections. I mean, we've certainly worked hard, somebody's worked hard to get these reform members on the board. So there is a majority.

The turnout for the elections has not yet know, has never been really all that great. But there have been some Facebook groups along with, you know, the OFT and orda, Right. The Ohio Retirement for Teachers association that has, you know, endorsed candidates.

Right.

And so, yeah, I think that, you know, it's been a process of electing people, although in the past, it seems like each time we would elect someone, then, you know, the governor will step in and in effect nullify the impact of the election. That's been part of the. Part of the battle. But I mean, now there are, you know, seven reformers on the board and four others.

Right.

But of course, if the new law goes into effect, then will be we will be starting with eight appointed members and seven elected members. And as the terms of each of those elected members expire, they will not be replaced until we get down to having three elected members, two active and one retiree. That's the new law that was passed.

And you're referring to what some are calling the midnight massacre, where Adam Bird slipped in this amendment and some say the process by which he did it was unconstitutional because it wasn't part of the reconciliation of the budget. So that stands to be. That remains to be seen whether. Whether or not this law will go through or not. But, yeah, you're referring to stripping the board of the elected teachers and letting the governor put his own people in. Did you want to talk more about the bonuses? I mean, this midnight massacre is a big deal, and we were going to talk about that, but now's as good a time. But the bonuses, there's a lot of. I mean, how many investors are there? Aren't there like.

Like dozens of people who work as investors at strs?

Oh, it's. I think it's pretty close to 100 people who are, you know, doing the investing.

Is that typical of a state pension to have that many investors?

What is, you know, what is more typical is to basically outsource that. So other pensions do not have their own employees doing this. But that number of people is probably needed to handle the investing of a pension the size we have. But what is more typical for other pensions is outsourcing that. In other words, they will hire some investment firm and pay fees to that firm to do the investing. And, you know, I mean, STRS claims that, you know, they're actually saving money. What you have to do is you have to look at the total investment expenses relative to the assets for each pension. And some of those expenses are internal and some are external.

STRS has a larger proportion of internal expenses than most other pensions. You know, overall, I don't know, it's. It's a little bit. It's. It's kind of hard to always compare pensions because nobody. It's an industry that is inherently not all that transparent, I think, in a lot of cases. And so, yeah, I mean, I think that's. It's a lot of people.

But if we weren't doing that, I mean, the choice would be if you. If we were going to do. If we would continue to do active investing, it may be that we're not paying as much money for that as we would if we outsourced it. But I think the relevant comparison is what we would be paying if we had a lot more passive investing. In other words, investing in index funds is what meant by passive investing, where you're not trying to beat the market, you're just trying to follow the market.

So it's kind of like when you have a portfolio, you have a growth fund or you have a more conservative approach, right?

Yeah. I mean, we have a diversified portfolio. We have domestic stocks, international stocks, we have bonds, and then we have alternative investments. And our alternative investments have been another area, I think, where, you know, there's been some controversy about how they have performed. When I first got on the board, the benchmark for evaluating alternative performances was our own performance. So you can't lose, right? I mean, did you beat yourself? I mean. So, I mean, I think. And that is no longer the case.

That's one of the changes that we've brought about. This is where, you know, I don't want to get too far down into the weeds because I think it'd be hard for people to understand. But, you know, what's the yardstick that you use when you evaluate, you know, your performance? And part of the problem is, you know, we compare ourselves to other pensions, but everybody is using their own yardstick. You know, it's like, well, we all have, like, a distance race, but the distances are all different. So the time that you clock, the winning time, is going to be different for everybody. That's what makes it really hard, you know, to make these comparisons. And that's when I say that, you know, in a sense, the industry itself is not particularly transparent. It makes it difficult.

But yet, I mean, and we don't need to talk about this, but yet all these states with pensions, a lot of them, I Mean, they're all struggling. They're going to the legislature. We'll talk about that in a little bit. But there need to be solutions out there because there's more problems than solutions. As an economics professor, you have a pretty good handle on this, but how many people on the board, without being too snarky, I guess, how many people possess your understanding of these economic nuances?

Well, I mean, I think there's. I mean, there are some board members who, Who I think. I mean, I don't know if they have, you know, part of the reason I have the understanding. I don't know if it's because I. I mean, obviously being an retired economics professor has. Has helped me out. But this area was certainly not an area that I had pursued as part of my academic responsibility. But, I mean, I had the tools.

I have the tools, more tools than anybody else. Try and understand, you know, what's going on here. But, I mean, we. I mean, some of the board members, some of the, you know, the reformers are, you know, I mean, they're working hard and they're, you know, trying to educate themselves. And, you know, I think it's true not only of the elected members, but, you know, of the appointed members. Good as well, you know. You know, not everybody always has, you know, like, investment expertise. So.

So they relied on you heavily when you changed the benchmarks a little bit, would you say? Was it your eye on me?

I mean, I. I have been an outspoken proponent of that. You know, the benchmarks are. That we adopted were those that were had. Were suggested to us by our investment consultant. You know, we had a couple of different choices that we could make. I think that our current benchmarks, while not perfect, are better than what we had before, but I think there could still be some improvement there.

Okay, so I've read some of your writings, in particular your letter to the editor, and you explain, I think, pretty. Pretty well. And maybe our listeners will benefit from this if you explain it again, terms like unfunded liability, employee contributions, employer contributions, the differences and what the problems are.

Yeah, sure, absolutely. One way to kind of look at a pension, this isn't. There are differences, but it can probably help people is to, in a sense, say you can look at an unfunded liability as if it were a mortgage on your house. You bought a house that cost a certain amount of money and you have to pay for it, but you don't have all the money right now, so you basically are borrowing some of that. And when you borrow, you. You not only have to repay the principal, but you also have to pay interest on that. So when actuaries look at, and these are the people who study the finances of pensions. And by the way, the board is only empowered to make changes to benefits that are approved by our actuary.

So that's an important thing. It's not. The board can't just vote to, well, let's offer people a colo. Or let's, you know, make some other change. Anything we do has to be approved by our actuary.

Can we stop and just tell me who is this actuary? Is this somebody independently, objectively, you know, chosen by both sides or.

Yeah, I mean, this is, I mean, there are firms that provide this service. The name of our actuary is Chiron, and I think they're well respected actuarial firm. There are certainly others out there, but, you know, I think they've, you know, they're, I think they do a good job in terms of, you know, providing the board with, with information.

Okay, so I interrupted you. You were explaining that you can only do with the actuary.

Okay, Right. And so when we look at the unfunded liability, in a sense, the pension has made promises to pay people who are working right now certain benefits when they retire. But the benefits that are being paid out now are significantly more than the employer and the employee contributions combined.

Wow, that doesn't sound good.

So, yeah, I mean, it's, it's a, I mean, it's, it's a problem for strs because STRS has a, one of the bigger gaps. It's about four and a half percent of our, of what is, you know, being paid out versus what is coming in. There's a, you know, there's a deficit there. And I can't remember exactly what the number is, but it might, I had it in my article. I think it might be.

Exactly. You said that they pay out about 648 million monthly in benefits, but receive only about 313 million in contributions, constituting a negative cash flow.

Yeah, so we're basically like $300 million short every month in paying the benefits. And so that has to be made up with investment earnings. And most pensions have a circumstance like that, but the gap is not so big. And I think the best way to try and understand why that's a problem is because, you know, if the value of your investments, say, go down by 50%, if you have $100 and it goes down to $50, that's a 50% decrease. In order to get back to where you started, you need 100% increase on the $50 to get back to 100. And so every time there's a down in the market, the ability of the pension to just get back to where it was before is made much more difficult by this negative, this cash outflow and other pensions. Almost, almost every pension has a negative cash outflow, but it's not as big. And because it is so big at strs, it creates a lot of, you know, volatility for the pension.

I mean, there, there was before the 2008 financial crisis, the pension was almost 100% funded. It was in the 90s in terms of, you know, the assets to liabilities. And I think, I don't know if I have this exactly right, but I think we went down into like being only in the 50% funded after that. And that was one of the things that prompted the pension reform in 2012, which, you know, reduced benefits, you know, increased the retirement, the number of years that you had to work at a full retirement. And actually those are the people if you retire. One of the changes that was made in 2012 was you had to wait five years in order to get a cost of living increase. So if you retired in 2012, you were supposed to then start getting your first cost of living increase in 2017. 2017 rolled around and they eliminated the cost of living increase altogether.

So those people have gone for a very long time, especially before we did anything to try and restore some of the benefit cuts. A lot of those people have lost even a lot more money than the 32% since 2017. I mean, add on another five years where people retired and didn't have any increase. And those are the people who really, in a sense, you know, have gotten the, you know, the raw end of the stick. And, you know, the difficult thing is you make a decision to retire being told this is what your benefits are going to be. And when you make that decision, it's pretty much irrevocable. You can't go back. So you said, okay, I know I'm going to wait five years and now I'm going to start getting cost of living increases.

And so this is how much money I think I gonna need. I think I can retire. And people did that and then had the rug pulled out from under them.

And that's part of the sad story you write about. And as you stated, in Ohio, employers pay nothing toward the benefits teachers earn.

Yeah, I mean, because there's something that is called, it's what it's called normal cost. And normal cost is the value of the benefits that a teacher earns in a given year. So if you're a teacher working, you get a certain salary and that given what the pension promises, you've earned certain benefits that they're going to have to pay to you when you retire because of the negative cash outflow of STRs, basically all of the employer contribution is going towards paying the unfunded liability. So it's kind of making. I don't really like this analogy, but it's making the mortgage payment, the principal and the interest. But even that is not enough. And so some of the active teachers contributions, some of their 14% is also going toward paying for the. Basically the benefits that retirees are getting right now.

That's why when I say that it's kind of the worst deal, it's because you're paying in more than the benefits that you've actually earned for the pension that you can get. And so that's something that is, I think, really unfair to active teachers that they're doing this.

And you wrote that it occurs neither for other public pension funds in Ohio nor for any other major public pension in any other states. Why are they picking on us, Rudy?

The active teachers are paying 14%. And you know, from when, if you go back, I don't know, 34, 35 years, the amount of money that teachers are paying, I think went up about 60%. And the employer contribution hasn't gone up in 38 years. And so it hasn't gone up. And it's one of the lowest in the country. You know, the median, I think, is about 30% for a non Social Security state. And that's something that, you know, I don't know, all the listeners understand that, you know, teachers in Ohio do not pay into Social Security, and so they don't earn Social Security benefits based on their teaching. And as a result, you have to compare then that the pension.

Because there are states where people have a pension and they get Social Security. And so you kind of have to add those two things together if you're looking at your retirement income. But if you compare us to other states that also are non Social Security states, the median employer contribution is about 30%, and we're at 14% and it hasn't gone up in 38 years.

Yeah, and there's like, what, 19 states, I think, that are considered non Social Security pensions. And you talk about that sound right.

Yeah, that sounds right. Yeah.

And we'll talk a little bit about maintaining the variable employer contribution here in a second. Like, I grew up in Pennsylvania, where They do pay both. And I was reading that every year they adjust the contribution based on probably what your friends, the actuaries, say and the experts agree is needed. So do you want to talk about what you think Ohio is doing wrong and what the General assembly should do? And I know you're probably going to talk about this variable employer contribution as being part of the solution, right?

Absolutely. In most pensions, in fact, I could only find, I think, maybe one other major pension in the United States where the employer contribution is fixed. The way pensions were set up to be run was that the employee contribution is fixed. And periodically a legislature will come in and say, well, we need to raise that, but it's fixed. The employer contribution varies from year to year based on what's happening with investment performance. So if investments are really doing well, you don't need as big of an employer contribution. But in years when investments do not do well, you need a bigger employer contribution, and that helps to kind of balance things out. And, you know, we don't have that in Ohio.

None of the pensions operate like that. So this is a system that was kind of, in a sense, you know, set up to have a problem to begin with.

Set up for failure.

Yeah, I mean, I don't want to. I don't want to use the word failure because I think, you know.

You.

Know, I. I think right now, you know, there's like, the pension is. Is safe. It's not like, you know, tomorrow it's gonna, like, go out of business or something like that. But it is a problem that, you know, forced us to make a lot of these cuts. And still the problem that forced. That exists because we didn't bother to increase the amount of money that employers are paying. So.

And what we've called for, and I think what most of the unions have called for, is an increase in the employer contribution. It would still be fixed, and it would still be a lot lower than what the median is, based on the numbers that are being talked about.

Right. Other states are doing this, you know, half of them.

Really, you know, when I hear, well, you know, we can't afford it, or it's this much money, I mean, if everybody else is doing it, you know, we ought to be able to do it, too. We're not that different. It's all a matter of what your priority exactly. You know, who you want to give tax cuts to.

Exactly.

And where you want to spend your money. I mean, you know, we're spending all this money giving vouchers to people to go to private schools.

This ed Choice, which has been ruled unconstitutional as well. Yeah.

Right. And, you know, the legislature, the way it works in Ohio, I guess, can just ignore that. Even if it's ruled unconstitutional, apparently. They can just ignore that.

Yeah, well, we have a history of that in Ohio with gerrymandering and school funding. And why not this? I don't know. I think we need to get these 500,000 teachers telling 10 friends of theirs, and then we'll have maybe a good portion of the state paying attention to this mess. I mean.

Yeah, absolutely. I think you're exactly right. I mean, I think that's what it's going to take, you know, because, look, 500,000 people and, well, I mean, some of them are married couples, but, you know, most of them are probably not. And so, you know, if they have, you know, if they're married or they have friends and they have relatives and they, you know, that adds up to a lot of people. You know, if teachers start paying attention and really get, you know, get active.

Right. Gotta wake up.

And by the way, I just. It came in an email while we were talking that plaintiffs. That the lawsuit has been filed. Lawsuit filed over SDRs, board overhaul. Plaintiffs are members of Ohio's three largest education unions.

Yes. Wow. And you heard it first here. So they finally filed it. Wow.

I haven't read it because it just popped up, but I just read on my screen here, I happen to have my email open, and that popped up in the email there.

Okay, so it's.

Yeah. Oea, the OFT and the ocaaup.

That's great.

Conference of the American association of University Professors.

We're talking about a lot of people now. I mean, see, just us talking about it made something happen. It's like the Heisenberg effect or whatever, you know. Oh, my. Well, that is exciting. Well, I'll have to read that as soon as I get off here. Yeah. I've talked with Melissa Cropper over at oft, and everybody's very passionate about.

About this. About this issue, trying to help us out. So. So a couple more questions before I let you go, Rudy. So how would you answer the criticism? Because I am on the, you know, the Facebook book chats, and I see this, the criticism that the reform candidates have failed to deliver on their promises. How would you answer that criticism?

I think that we have made some significant progress, but you have to recognize that there are constraints. One of them being, I mean, one of the changes that the reformers brought about also was to get our own fiduciary attorney so that we Ask about, well, can we do this? Or if we do this, would it be a violation of our fiduciary duty? Before we had our own fiduciary attorney, the board's own fiduciary attorney, we had to rely on the STRS legal staff to give us that advice. And who.

Whom you don't see as the best allies. Yes.

Yeah. And so, you know that there's always that threat that has, you know, been hung over board members that, well, you know, if you do this, you know, you'll violate your fiduciary duty. If you don't pay bonuses, you'll violate your fiduciary duty. That has been, I think, a difficult thing. And, you know, board members are obviously, you know, and rightly so, should be concerned about that. You know, they're watching what happened to me and Wade Steen.

Right.

And, you know, that's in the back of their mind. Yeah, they can't necessarily do whatever they want to do. We're constrained. And, you know, the other thing, of course, is that even among, you know, the reformers, you know, you have to have a consensus. That consensus has to be reached in an open meeting because, you know, we can't just, like, behind the scenes, go talk to each other about what we plan on doing at a board meeting. And so it's not the easiest to always build a consensus and get everybody who's necessarily going to be on the same page. And so some of the time, you may see people cast a vote that they might not always be that happy about, but it's one of the things that, you know, do you want to just leave people hanging out there? And I think that, you know, overall, I think we've accomplished, you know, a significant amount. We've brought about a significant amount of change.

I think that, you know, depending on what happens now with this lawsuit, we'll see whether or not that turns out to be durable or not, or can just be all undone. But to some extent, our hands have been tied in terms of we can't just vote to increase, to restore the Cost of Living Index, or we can't just vote and say, well, we're going to let teachers retire after 30 years with an unreduced benefit because we are constrained by. By the law and, you know, we have to get the approval of an actuary, you know, board members. A lot of the board members are in a difficult position, you know, like trying to understand all these benchmarks when you're not, you know, an expert in finance. Yeah.

Sounds complicated.

So, you Know, like, can we get more. I think we have gotten more passive investing. I would still like to see even more. But, I mean, we've. We've. I think, you know, I think we've moved in that direction.

So you're saying that. That getting these people the bonuses have been so contentious and so huge bonuses, like, I don't know. I think I saw Colleen Marshall's done a good job reporting on this. Totals of $300,000 in bonuses. And you've kind of reduced that amount. Right.

A lot of the bonuses were being paid, for example, on what are called gross returns, in other words, returns before your expenses. And that. That is not a best practice. It's not a good practice. It doesn't make any sense to do that. And that is a change, for example, that I think the last time we revisited our, you know, PBI policy, our bonus policy, we made that change. We said, from now on, you know, it's only going to be on the basis of, you know, net performance, performance after expenses. And so I think that is certainly a positive thing.

But when we've had discussions, we've been told by a fiduciary attorney that if we were to just eliminate them and not make any other offsetting change in compensation, it would be a violation of our fiduciary duties. Oh, so. Oh, boy, you hear when, you know, well, that's a pretty big threat to board members.

Yeah.

So it's not always as easy to make the changes, you know, that you would like to make. There are constraints on board members, you know. Of course, you know, it'll say. And people rightly point out on this piece of paper that, you know, these bonuses or these payments are subject to board approval and they can be revoked at any time. And. But what we were told was, well, if you do that, you're going to have to come up with some other way of paying people about the same amount of money, or it's going to be a violation of your fiduciary duty. So it's, you know, people read something on paper, but then they're not hearing, you know, what say the board is being told about this.

Right. It's not as cut and dried as it seems. Yeah, well, this fiduciary attorney, and this has been for about a year or so now that you've had the counsel.

Yeah, I think it's been about that long. And we're the. The guy that we had before he. He left his. His law firm. So we now have a new fiduciary attorney and the first guy we had, I think the board was pretty happy with. And so far, you know, I think the new guy has only been there for, I think, one meeting. So we don't know yet.

But, yeah, I think it's a good thing to have. You know, it's like an independent voice that, you know, explains that, you know, that they know, they're working just to advise the board. And so, you know, the board, you know, before, when I first got on the board, the board, even when it met an executive session, the executive director and staff and the legal counsel were always there.

Oh, geez.

No matter what. And so, you know, now we have had, you know, executive sessions where there's just board members and our, you know, and our fiduciary attorney there. Sometimes an attorney general is there, but, you know, but basically we're getting, you know, legal advice from an independent attorney, not somebody who works for strs, the other entity.

I mean, I've served on a number of boards every year or in my career. And when I learned that you were being sued and taken to trial, it just floored me to think, what happened to the indemnification? What happened to these board of directors insurance premiums that we always pay? How are we safe? I just don't feel safe anymore.

Yeah, I mean, it was several months, I think it was after the lawsuit. And the first thing that I did was to retain an attorney. And the Attorney General said, well, you know, we can pay for your attorney, but. But I have to appoint your attorney. So the same attorney General who is suing you is going to appoint my attorney. And that has been flagged a number of times when STRs every. I think it's. I want to say every five years, but I might not be right about that.

But periodically, STRS is supposed to have what's called a fiduciary audit, which looks at all of the process and how the pension works. And one of the things that was flagged in the 2008 Fiduciary Audit and then flagged again is this lack of independence that the STRs cannot hire its own attorney. It has to be through the attorney general. And they've said the fiduciary, These are experts on pensions, and they say it's a clear conflict of interest and to see how totally bizarre. So not only is the person who's suing me wanted to hire my attorney, but then they also hired an attorney to represent the two attorneys who wrote the, quote, unquote, anonymous complaint against me.

Right.

So if that, you know, how can that possibly be fair?

It can't. And you only can hope that a jury understands all this or if it's a judge, a judge, it's a bet. It's going to be a benchmark trial, isn't it? If it goes to trial?

I don't know yet.

You don't know yet.

Wrangling over that.

So a jury of your peers. I still am shaking my head at some of this pension stuff. It's like, okay, all these terms, unfunded liability, normal cost. But the long and short of it is we need to fix it and something needs to be done.

Absolutely. And I think the only way it's going to get a get fixed is when people, when voters, when teachers start voting and getting other people to vote. Because, you know, as I said, I think education is so important in our economy today. I mean, this is the information economy, right. You know, everybody needs it.

Does it?

Whether you go to college or you don't, if you're going to be a nurse, you're going to be an electrician, you're going to be a plumber, you're going to, whatever you do, you need to be educated. Ohioans need to be educated. And of course, many of the good paying jobs or the best paying jobs require a significant amount of education and they certainly require literacy and numeracy. And so that's why, you know, keeping your promise to teachers and having, you know, the best and the brightest who want to go into teaching is important. That's why it's not just for the teachers.

This is about societal.

Right. I mean that, you know, teachers working conditions are students learning conditions. And so what are part of those working conditions is when you retire, are you going to live in poverty or be able to have a dignified retirement? That's all teachers are asking for. We're not asking, you know, no teachers are asking to be billionaires. Right. And they know they're not going to be billionaires, they're not going to be millionaires, but they're not going to starve.

And eat cat food. I mean, you got to worry about these people that are living into their 90s and their pension is shrinking, shrinking, shrinking.

Right, exactly.

That's my plea. That's my plea. Imagine your favorite teacher, you know, sitting there that you had, you know, 30, 40, 50 years ago and she's sitting there looking out the window wondering what's going to happen to my pension? You know, she might be a widow or widower or, you know, it's just really sad. It's just so sad. And when I tell people that I had people saying where do I donate? They wanted to donate right away to the, you know, the defense fund. They were taken by that, you know. So this lawsuit, let's hearken back to that because this just came across. So this is a lawsuit that will block what DeWine and Byrd did in the midnight hour to say that they're going to change the structure of the board.

Is that, is that your understanding?

Yeah. What it says here is it's filed in Franklin County Court a common pleas challenging and unconstitutional and discriminatory provision in the most recent Ohio state budget that strips educators of their rightful voice on state Teachers Retirement System Board. That's.

There you have it. Wow.

From the press release that AAUP just sent out at whatever while, while we were, while we were talking.

So that is something else here on September 16th. What's today? Tuesday. I'm retired, so I never know what day it is. September 16th, Tuesday. And you hear heard it here first. 2:21pm Well, I think that's a good place.

20 minutes after we started our.

Yes, that's crazy. Seems like a good place to stop. And I think we've only just begun to try to get the word out and hope people are paying attention. And we, we just can't let them, let them persevere. Yep. Thanks for your time, Rudy.

All right. Well, thanks for having me on, Michelle.

You bet.

Good to see you.

You too. Take care.