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Originally Posted by Boomer
STRS, the State Teachers Retirement System of Ohio, is under serious controversy with some big questions about finance and transparency. ‘CHAOS’ is the word being used in some headlines in the Buckeye State.
WCPO in Cincinnati has a May 16 article on their site that addresses the reasons for the questioning of those who have been handling the investments of the fund’s $65 Billion.
Even if you are not a retired Ohio teacher but are someone whose retirement funds are in someone else’s hands, you should probably read about this mess.
Boomer
PS: All Bogleheads and other index fund investors will appreciate the part about those “actively managed” funds. Not only Bogle, but also the famous book “A Random Walk Down Wall Street” by Burton Malkiel prescribed index funds decades ago.
The mess in Ohio is looking like a classic example of what can happen if the wrong people get their hands on other people’s money. “Where there’s smoke” ??? ……..
When it comes to choosing who gets to invest other people’s money, scrutiny of the advisory is of top importance. Too many wolves out there merrily guarding lambs. BILLIONS! EEK! I guess we will see where this one goes.
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The under funding and mismanagement of public pension funds could very well be a very large financial disaster waiting to happen, all too much political influence in the management of those funds, being public retirement funds they have a different set of federal regulations governing them, many would have gone into receivership due to the funding levels if they were private retirement funds but being public retirement funds it is assumed they can always raise taxes to cover their obligations, rather than spend money on future obligations municipal managers would rather of course spend money on more important things, kicking the can down the road gets more and more difficult and dangerous as the unfunded liabilities get bigger and bigger, the cascading effect of default could make the 2008 housing meltdown a minor blip by comparison , or so some will tell you