Originally posted Feb. 15, 2007

Independent Fiduciary Services, Inc. (IFS) presented the results of its fiduciary performance audits of STRS Ohio and the Ohio Police & Fire Pension Fund at the December 2006 meeting of the Ohio Retirement Study Council (ORSC). In July 2004, the ORSC chose IFS to conduct the audits. This undertaking was the result of some members’ concerns about STRS Ohio that led to language in Sub. Senate Bill 133 requiring each of the five Ohio public pension plans to undergo a fiduciary performance audit every 10 years.

The detailed 338-page report on STRS Ohio that the ORSC received includes 85 recommendations. Since receiving that report in mid-December, STRS Ohio staff have been reviewing the document and compiling responses to each recommendation. At the Retirement Board’s retreat in January 2007, the board unanimously approved staff’s analysis and recommendations

Topics covered in the audit include: investment management structure and costs, asset allocation, investment accounting, board governance, and STRS Ohio’s organizational structure and resources, as well as statutory provisions and administrative rules that govern the system’s operation. In the executive summary that accompanied the report, IFS noted “…the results of this review demonstrate that STRS is generally in line with best practices with regard to much of its overall governance, administration and management of its investment program.” Further, the report noted that “…STRS governance policies and rules are impressively comprehensive and they cover all of the significant aspects of governance a sophisticated public pension fund requires.”

More than 20 of the recommendations apply not only to STRS Ohio, but also to the other Ohio public pension systems and/or the oversight responsibilities of the ORSC. These recommendations will require further discussion among the systems and the ORSC.

Click here to view a PDF version of the IFS recommendations and STRS Ohio’s responses.

Click here to view a PDF version of the complete IFS report (2.1 MB).