Under a State Retirement System? Might Want to Read About the Chaos in Ohio.

[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.

[jimbomaybe]

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.

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

[graciegirl]

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.

I tried to understand better what you are saying. I don't know what a "boglehead" is. I found this article from the Cincinnati Enquirer. Can you try to clarify a bit more?

https://www.msn.com/en-us/money/other/ohio-teachers-pension-board-wants-to-know-who-wrote-anonymous-hostile-takeover-memo/ar-BB1mzoKU?ocid=BingNewsSerp

[manaboutown]

I tried to understand better what you are saying. I don't know what a "boglehead" is. I found this article from the Cincinnati Enquirer. Can you try to clarify a bit more?

https://www.msn.com/en-us/money/other/ohio-teachers-pension-board-wants-to-know-who-wrote-anonymous-hostile-takeover-memo/ar-BB1mzoKU?ocid=BingNewsSerp

Gracie, a Boglehead is basically an index fund investor.

This book is highly informative about their investment philosophy which follows that of Jack Bogle, the founder of The Vanguard Group.

John C. Bogle - Wikipedia (https://en.wikipedia.org/wiki/John_C._Bogle)

Amazon.com (https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365)

[HandyGrandpap]

I tried to understand better what you are saying. I don't know what a "boglehead" is. I found this article from the Cincinnati Enquirer. Can you try to clarify a bit more?

https://www.msn.com/en-us/money/other/ohio-teachers-pension-board-wants-to-know-who-wrote-anonymous-hostile-takeover-memo/ar-BB1mzoKU?ocid=BingNewsSerp

Hi Graciegirl, nice to hear from you!!
Below is a link to the community for bogleheads, ..fyi
Bogleheads Investing Advice and Info (https://www.bogleheads.org/)

[Stu from NYC]

For that huge amount of money nobody watches performance?

[Shipping up to Boston]

A good read if you are unfamiliar with public pensions....


https://www.google.com/url?sa=t&source=web&rct=j&opi=89978449&url=https://siepr.stanford.edu/news/public-pensions-are-mixing-risky-investments-unrealistic-predictions&ved=2ahUKEwiWnsDcwpWGAxUHpIkEHYyEBMcQFnoECDEQAQ&usg=AOvVaw3QcDNljX9ibT2RDJuVl72b

[Boomer]

Gracie, I like the Bogleheads‘ philosophy. They can see through the obfuscation that surrounds so much in the world of financial advisory where advisors can be very highly incentivized by the funds or other investments they can choose to use for their clients. (Like everything else, there are some good and some bad advisors.) I follow the Boglehead podcast and their forum sometimes. I think the article on the WCPO site can give you more detail about the stink in Columbus that is hitting the fan right now. You might want to look at that article. It takes a short scroll down to find it at wcpo.com.

Thank you, manaboutown and HandyGrandpap for providing the links to more about the Bogleheads. I mentioned them in passing because an early paragraph in the article referred to index funds.

And, Stu, somebody is trying to “watch performance” and this is not the first time Ohio teacher retirement has been questioned. There is a lot of finger-pointing going on right now, added to the can-kicking

Boomer

[Topspinmo]

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.


Not to worry they get bailed out just like GM and banks too big to fail. It’s only paper money being printed. :shrug:

[Normal]

Not to worry they get bailed out just like GM and banks too big to fail. It’s only paper money being printed. :shrug:

California’s system was denied a federal bailout, how would you think Ohio had any chance of a bailout? The teachers never supported the federal system, there is really no leg to stand on.

The state will figure itself out.

[Stu from NYC]

California’s system was denied a federal bailout, how would you think Ohio had any chance of a bailout? The teachers never supported the federal system, there is really no leg to stand on.

The state will figure itself out.

Citizens of Ohio will have to make up the difference I would think

[ithos]

I didn't think the state could default on pension and retirement obligations but maybe they can if a second great depression occurs.

The important lesson is that in the absence of a dedicated judicial process for preserving the governmental functions of a state in debt renegotiations, sovereignty may offer meager protection for the interests of the general public and public employees. In the event of a severe state fiscal crisis, all parties may have to share the burden of putting the state’s fiscal house in order.
When States Default: Lessons from Law and History (https://www.clevelandfed.org/publications/economic-commentary/2017/ec-201716-pensions-when-states-default)

[M2inOR]

Here's the Oregon story about their PERS Public Employee Retirement System. There are several tiers.

With the original Tier 1, there was a guaranteed rate of return of approximately 7% per year, and a very short period of time to get vested. Worse, the pension benefit was determined not by total contributions, but rather by the average pay of the last 3 years before retirement.

Even more worse, if market returns were more than 7%, then all that money was credited to the employees retirement account. If market performance was less than 7%, then taxpayers made up the difference to credit the pension acct.

So...a person could be in a low paying job for most of those early years, with smaller contributions, but only the average pay of those last e years would determine benefit, not their actual contributions over their employment.

Another "benefit" was that there was an uplift in pension benefits if one remained in Oregon after retiring, to help pay Oregon's high state income taxes.

There are now several tiers to help Oregon reduce its liability, but bottom line is that the PERS system is extremely underfunded, and it's beneficiaries receive a benefit far higher than employment contributions have funded.

So glad to no longer be paying taxes to Oregon.

[opinionist]

The coming default on the National Debt is a bigger problem. The two choices are direct default with a total loss of available credit (supply chains get frozen) or printing money until it takes a wheelbarrow of cash to buy a loaf of bread. Printing money seems to be more popular.

[jojo]

Actually STRS manages 93 billion. The teachers have been protesting for several years and just this year have managed to get a majority on the board. Last year one day before the election results were announced Governor DeWine replaced an appointed board member so that the reformers would not have a majority. That board member was reinstated by the courts in April. This month, days before another reform candidate was elected (85,000 to 3,000 votes), the Governor and State Attorney General filed charges against two board members who four years ago had put forth a proposal for another investment company to manage some of the funds. This was based on an anonymous letter from someone at STRS. Nothing happened. i.e. there were no funds invested. There is a history of risky investments in private equity, hedge funds, downtown buildings that are now empty, international holdings with lavish bonuses for Wall Street. Teachers are suspicious that the politicos have something to hide. I just watched the entire board meeting. I am a confirmed Boglehead and the teachers have been asking for indexed funds. Someone posted that Nevada has 2 employees. Ohio has 500. State media have not covered the story well. Stay tuned.

[Marine1974]

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.

The state of Illinois is suffering from a government-worker pension shortfall of over $111 billion – the worst retirement crisis in the nation. Government-worker pension costs are overwhelming the state's budget: 19 percent of the budget is going to pay for pensions, compared to 4 percent in other states.

[Wondering]

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.
New York State has the best pension/retirement system, in the US, for teacher's and NYS government workers.

[Plinker]

Is social security not on a similar track of insolvency? Politicians have refused to address the impending deficiency which is estimated to occur in around ten years. The topic of a long term fix has always been considered the third rail and is the reason our “leaders” have refused to address the issue. Reducing benefits would result in their political demise.
There are solutions to strengthening SS for decades to come which include increasing the amount of wages subject to the SS tax, expanding the types of compensation subject to the SS tax and increasing the SS tax rate. None of these choices are going to be popular but kicking the can down the road is a recipe for disaster.
I will leave you with a quote from Mark Twain: “Politicians and diapers must be changed often, and for the same reason”.

[Gsorace]

Actually STRS manages 93 billion. The teachers have been protesting for several years and just this year have managed to get a majority on the board. Last year one day before the election results were announced Governor DeWine replaced an appointed board member so that the reformers would not have a majority. That board member was reinstated by the courts in April. This month, days before another reform candidate was elected (85,000 to 3,000 votes), the Governor and State Attorney General filed charges against two board members who four years ago had put forth a proposal for another investment company to manage some of the funds. This was based on an anonymous letter from someone at STRS. Nothing happened. i.e. there were no funds invested. There is a history of risky investments in private equity, hedge funds, downtown buildings that are now empty, international holdings with lavish bonuses for Wall Street. Teachers are suspicious that the politicos have something to hide. I just watched the entire board meeting. I am a confirmed Boglehead and the teachers have been asking for indexed funds. Someone posted that Nevada has 2 employees. Ohio has 500. State media have not covered the story well. Stay tuned.

...and don't forget, the STRS members agreed to receiving a cost of living increase when warranted. This was removed (due to "lack of funds") while the board continued to assign hefty bonuses to themselves.

[Nell57]

Thanks for the excellent summary. The mismanagement of funds and exorbitant overhead at Ohio STRS is appalling.
American Greed should be filming this debacle.

[Topspinmo]

California’s system was denied a federal bailout, how would you think Ohio had any chance of a bailout? The teachers never supported the federal system, there is really no leg to stand on.

The state will figure itself out.

Key words —-unions, teachers.

[rsmurano]

A lot of other states have this same problem. Plus, in Oregon, if you get a pension from Oregon state and you move out of the state while receiving your pension, they withhold 6%, how can that be legal? I know people that work in Oregon and Washington state and they both said both states are so corrupt, but they can’t say anything.
Oregon has PERS pension system and that has been hurting for decades.
Now what some of these states are doing and that’s invest these retirement systems in carbon neutral/climate funds, which have been losing money for many years. If states are ran by these type of idiots and their pension plans go broke, then the state needs to come up with the extra funds somehow to fund their pers system. Same goes for California, they are so broke but they still print money to give to illegals.

[jimjamuser]

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.
Agreed....... that Index Funds are WAY superior to "managed funds". It looks like we need more information about the Ohio system.

[jimjamuser]

I tried to understand better what you are saying. I don't know what a "boglehead" is. I found this article from the Cincinnati Enquirer. Can you try to clarify a bit more?

https://www.msn.com/en-us/money/other/ohio-teachers-pension-board-wants-to-know-who-wrote-anonymous-hostile-takeover-memo/ar-BB1mzoKU?ocid=BingNewsSerp
Since Ohio opted out of social security, the teacher retirement system became EXTREMELY important. No wonder there is so much controversy!

[CFrance]

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
This was all in one sentence and very difficult to follow.

[jimjamuser]

Gracie, a Boglehead is basically an index fund investor.

This book is highly informative about their investment philosophy which follows that of Jack Bogle, the founder of The Vanguard Group.

John C. Bogle - Wikipedia (https://en.wikipedia.org/wiki/John_C._Bogle)

Amazon.com (https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365)
An Index Fund investor is a smart investor because they usually beat the so called "managed funds", which are usually MISMANAGED funds because the active manager buys and sells TOO OFTEN. And that is because their job is high pressure to succeed, and the pressure backfires. Note : a small % of actively managed funds DO beat index funds, but usually not many years in a row.

[M2inOR]

RE: Social Security running out of money

Looks like 2034 is the tipping point if nothing is done.
Easiest thing Congress could do is raise the upper limit for the FICA deduction.

Something does need to be done as population growth is slowing and with baby boomers retiring, less workers to contribute.

Back in the late '70s when my working years started, there were warnings that SS would likely not be there when it was our turn to retire. My wife and I decided to max our IRA and 401K contributions. We worked in high tech, so there were no pensions.

So we saved. A lot!

Now that we are retired, and that we deferred our SS benefits until we turned 70, we got the 8% per year increase for our benefits and are now getting nearly the max monthly benefit offered. And we have our IRAs boosted because we converted our 401K funds.
As we don't know exactly what the future holds, we are also slowly converting those IRA funds into ROTH IRAs and paying the taxes now.

No chance that federal taxes will be lower in the future.

Those ROTH funds will make our estate simpler, and our heirs will not have to worry about taxes on those funds.

We now have Gen X and Y who probably not prepared for their retirement years.

[jimjamuser]

Actually STRS manages 93 billion. The teachers have been protesting for several years and just this year have managed to get a majority on the board. Last year one day before the election results were announced Governor DeWine replaced an appointed board member so that the reformers would not have a majority. That board member was reinstated by the courts in April. This month, days before another reform candidate was elected (85,000 to 3,000 votes), the Governor and State Attorney General filed charges against two board members who four years ago had put forth a proposal for another investment company to manage some of the funds. This was based on an anonymous letter from someone at STRS. Nothing happened. i.e. there were no funds invested. There is a history of risky investments in private equity, hedge funds, downtown buildings that are now empty, international holdings with lavish bonuses for Wall Street. Teachers are suspicious that the politicos have something to hide. I just watched the entire board meeting. I am a confirmed Boglehead and the teachers have been asking for indexed funds. Someone posted that Nevada has 2 employees. Ohio has 500. State media have not covered the story well. Stay tuned.
The empty downtown buildings have caught a lot of investors flatfooted. Covid and "work from home" started the empty buildings. That is why anyone or ANY ENTITY that is investing should include a large % of Index Funds in their portfolios. It smooths out surprises.

[jimjamuser]

The coming default on the National Debt is a bigger problem. The two choices are direct default with a total loss of available credit (supply chains get frozen) or printing money until it takes a wheelbarrow of cash to buy a loaf of bread. Printing money seems to be more popular.
I HAVE to politely disagree.

[jimjamuser]

The state of Illinois is suffering from a government-worker pension shortfall of over $111 billion – the worst retirement crisis in the nation. Government-worker pension costs are overwhelming the state's budget: 19 percent of the budget is going to pay for pensions, compared to 4 percent in other states.
Illinois is a relatively densely populated state and many baby-boomers are reaching retirement age. After the boomers retire and go to heaven the retirement systems of many states will return to normal. Future problems will be with over-population and non-citizen expenses.

[jimjamuser]

Is social security not on a similar track of insolvency? Politicians have refused to address the impending deficiency which is estimated to occur in around ten years. The topic of a long term fix has always been considered the third rail and is the reason our “leaders” have refused to address the issue. Reducing benefits would result in their political demise.
There are solutions to strengthening SS for decades to come which include increasing the amount of wages subject to the SS tax, expanding the types of compensation subject to the SS tax and increasing the SS tax rate. None of these choices are going to be popular but kicking the can down the road is a recipe for disaster.
I will leave you with a quote from Mark Twain: “Politicians and diapers must be changed often, and for the same reason”.
A good informative post. Also, many IMPORTANT problems are being ignored right now, which will catch up with us in the future.

[jimjamuser]

A lot of other states have this same problem. Plus, in Oregon, if you get a pension from Oregon state and you move out of the state while receiving your pension, they withhold 6%, how can that be legal? I know people that work in Oregon and Washington state and they both said both states are so corrupt, but they can’t say anything.
Oregon has PERS pension system and that has been hurting for decades.
Now what some of these states are doing and that’s invest these retirement systems in carbon neutral/climate funds, which have been losing money for many years. If states are ran by these type of idiots and their pension plans go broke, then the state needs to come up with the extra funds somehow to fund their pers system. Same goes for California, they are so broke but they still print money to give to illegals.
Illegals are one of many problems that are being pushed forward into the future. NOT a good idea.

[jimjamuser]

RE: Social Security running out of money

Looks like 2034 is the tipping point if nothing is done.
Easiest thing Congress could do is raise the upper limit for the FICA deduction.

Something does need to be done as population growth is slowing and with baby boomers retiring, less workers to contribute.

Back in the late '70s when my working years started, there were warnings that SS would likely not be there when it was our turn to retire. My wife and I decided to max our IRA and 401K contributions. We worked in high tech, so there were no pensions.

So we saved. A lot!

Now that we are retired, and that we deferred our SS benefits until we turned 70, we got the 8% per year increase for our benefits and are now getting nearly the max monthly benefit offered. And we have our IRAs boosted because we converted our 401K funds.
As we don't know exactly what the future holds, we are also slowly converting those IRA funds into ROTH IRAs and paying the taxes now.

No chance that federal taxes will be lower in the future.

Those ROTH funds will make our estate simpler, and our heirs will not have to worry about taxes on those funds.

We now have Gen X and Y who probably not prepared for their retirement years.
I don't think that US population is slowing if you count the illegals that don't want to be counted. Personally, I would like it to slow and then maybe the roads in Florida would catch up with the population growth.

[Stu from NYC]

sad how mismanaged so many pensions as well as SS is being mismanaged.

We live longer and should be raising the retirement ages to compensate.

[Shipping up to Boston]

This was all in one sentence and very difficult to follow.

Guess we can rule out the author as a teacher, huh! ;)

[CFrance]

Guess we can rule out the author as a teacher, huh! ;)
Good one!

[Boomer]

Actually STRS manages 93 billion. The teachers have been protesting for several years and just this year have managed to get a majority on the board. Last year one day before the election results were announced Governor DeWine replaced an appointed board member so that the reformers would not have a majority. That board member was reinstated by the courts in April. This month, days before another reform candidate was elected (85,000 to 3,000 votes), the Governor and State Attorney General filed charges against two board members who four years ago had put forth a proposal for another investment company to manage some of the funds. This was based on an anonymous letter from someone at STRS. Nothing happened. i.e. there were no funds invested. There is a history of risky investments in private equity, hedge funds, downtown buildings that are now empty, international holdings with lavish bonuses for Wall Street. Teachers are suspicious that the politicos have something to hide. I just watched the entire board meeting. I am a confirmed Boglehead and the teachers have been asking for indexed funds. Someone posted that Nevada has 2 employees. Ohio has 500. State media have not covered the story well. Stay tuned.



Thanks, jojo,

You’re right. They do manage 93 billion. I should have worded my original post more clearly on that number. They wanted to turn over 65 billion of that to some unknown company.

I hope this bright light continues to shine on them. It’s looking like one of those scenes where somebody switches on a ceiling light and all the roaches run for cover.

And, yes, the bonuses! Reading about this whole mess makes my skin crawl.

Boomer

[Stu from NYC]

Thanks, jojo,

You’re right. They do manage 93 billion. I should have worded my original post more clearly on that number. They wanted to turn over 65 billion of that to some unknown company.

I hope this bright light continues to shine on them. It’s looking like one of those scenes where somebody switches on a ceiling light and all the roaches run for cover.

And, yes, the bonuses! Reading about this whole mess makes my skin crawl.

Boomer

We keep getting invited to so called local investment advisors. Always ask about their qualifications to do this and horrified about the answers but people give their money to these advisors without having a clue.

[Robbb]

Gracie, a Boglehead is basically an index fund investor.

This book is highly informative about their investment philosophy which follows that of Jack Bogle, the founder of The Vanguard Group.

John C. Bogle - Wikipedia (https://en.wikipedia.org/wiki/John_C._Bogle)

Amazon.com (https://www.amazon.com/Bogleheads-Guide-Investing-Taylor-Larimore/dp/0470067365)

Yea with the poor long term return of the Boglehead stragety I'm not convinced thats the right way to go either. Vanguard pushes at least 30+ in international funds and also a high % in bond funds, neither of these have performed well over the past 10 years. Total Bond market funds are down 12% over the past 10 years and international funds are up just 16% over 10 years.

[Flyers999]

This thread is nonsense. Pensions are protected by ERISA, which is a federal law that sets minimum standards for retirement plans including establishing detailed funding rules that require plan sponsors to provide adequate funding for your plan.Also, it requires accountability of plan fiduciaries. ERISA generally defines a fiduciary as anyone who exercises discretionary authority or control over a plan's management or assets, including anyone who provides investment advice to the plan. Fiduciaries who do not follow the principles of conduct may be held responsible for restoring losses to the plan.

See, the OP is out of ..... wait,..... upon further review, ERISA only applies to private industry, it looks like the government can do whatever they want with your money.

Never mind.

[Caymus]

.....or it could vaporize into the cloud.:laugh:

https://www.msn.com/en-us/money/technology/google-cloud-snafu-erases-pension-fund/ar-BB1nisVZ?ocid=BingNewsSerp

[manaboutown]

Yea with the poor long term return of the Boglehead stragety I'm not convinced thats the right way to go either. Vanguard pushes at least 30+ in international funds and also a high % in bond funds, neither of these have performed well over the past 10 years. Total Bond market funds are down 12% over the past 10 years and international funds are up just 16% over 10 years.

I am not a Boglehead but put my toe in the water many years ago with a little VFIAX. It has grown satisfactorily. In 2022 and 2023 I sold some commercial real estate where most of my net worth remains and had to put the money somewhere. 60% net after taxes went into 6 month T-bills which when they mature I replace with new ones. I bought some VOO, VGT, SCHD and a closed end fund I have owned for dividends many years, RVT. I also bought some MLPs. The rest on the equity side I put into individual stocks, some for dividends and some for growth. Most have done OK. I bought some (for now) losers of course. Thankfully I bought some NVDA at about $183/share. Luck does play a role IMHO!

[Cliff Fr]

The fire fighters pensions are also under funded

[Boomer]

Update:

If you are a retired Ohio teacher and you are following this issue, you might want to go to wcpo.com and do a search of Ohio teacher pension. There you will find an article from last Friday, August 23, about subpoenas that were recently filed. The article includes a summary of the history of this convoluted, stinkin’ mess.

Ohio is not the only state that can’t keep greasy hands off pension money. News is out about states where obscenely greedy, elected officials, who are under the influence of deep-pockets lobbyists, are now trying to write and pass legislation that will force state pension funds to invest in crypto.

I first heard that crypto thing on a financial podcast and found it so incredibly stupid that I could not believe it. Pension funds are supposed to go on forever, not bend to the whims of propped up legislators, drooling over all that money employees paid into for decades to be managed outside of political influence. (Of course, in many states, that pension money has served as an ATM along the way for state shortfalls. But this trying to force crypto in pension funds is getting really weird. Seems like it should be illegal. But wait! Those trying to do this are making the laws.)

There is info out there now on this crypto plot. Google it if you dare — or care. Actually, even those who do not have a state pension should be paying attention to this. If this plan takes hold, it will be only the beginning and will eventually affect all kinds of investments. But they don’t care as long as they get their instant reward from their lobbyists, and as long as voters don't pay attention and vote against their own best interests.

We need to pay attention to the integrity, or lack thereof, of those in office and watch for slimeballs on-the-take, trying to pass laws forcing state pension funds to invest in crypto. What’s next? Anything goes? How can these idiots claim to believe in the market as the market when trying to legislate specific investment decisions to be made with pension funds?

Corruption pays well for those who can be bought and many of them know no bounds. We all need to be paying attention to what is in the works for those big piles of money in pension funds — because unrestrained greed is not only bad morals, it’s bad economics.

Boomer