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Ohio investigates teachers' pension system amdist reform efforts

The Ohio Attorney General was investigating the State Teachers Retirement System.

This happened after more than a year of turmoil between state leaders, the pension board and retirees.

The State Teachers Retirement System (STRS Ohio) is a public pension fund serving active, inactive and retired Ohio public educators.

According to its website, STRS Ohio said it manages $91 billion for more than 536,000 educators.

Some retirees said STRS Ohio has failed its membership.

The Ohio Retirement for Teachers Association (ORTA) claimed retirees went from 2017 to 2021 without a cost of living adjustment and received a 3% adjustment in 2022 and a 1% in 2023.

ORTA said STRS Ohio investment associates continued to receive bonuses every year.

Superintendent of the Warren County Educational Service Center and STRS Ohio member Tom Isaacs said they have always been promised cost of living adjustments.

"So, you have a number of elderly teachers who are 70, 80, 90 years old, who have been living on basically the same income for the last couple of decades, and while that's been happening of course, their property taxes have increased, their grocery bills have increased," said Isaacs.

ORTA has been working to elect people to the STRS Ohio board who are in favor of reform.

A 14-page anonymous memo was sent to state leaders, it claimed reformers with ORTA were working with a private investment entity, QED.

"Their collective efforts have resulted in what is essentially a hostile takeover of a public pension system by private interests," said the memo.

According to the memo, QED was found not to be qualified by an outside consultant.

Governor Mike DeWine asked the Ohio attorney general's office to launch an investigation into the allegations in this report.

"There are some serious questions going on here on whether some of the board members are actually pursuing the interests of the teachers they're supposed to be representing, or some kind of private, separate interest," said Dave Yost, Attorney General.

ORTA Executive Director Robin Rayfield said they have been asking for an investigation of STRS Ohio for six years, he believed the state was doing it now because reformers have a board majority.

"I know every one of those board members that we have elected, that we have endorsed, and were elected are all outstanding people, nobody is doing anything untoward or illegal or unethical," said Rayfield.

STRS Ohio Board Chair Dale Price said recent audits demonstrate STRS Ohio was well-run, and the pension fund was in a sound financial position.

"Questions raised involved board governance," said Price in a statement. "Teachers in the classroom and retired educators should know their pension is safe and secure."

He said the STRS Ohio will cooperate with reviews of the pension system.

Retired teachers don't receive social security unless they had other jobs in addition to teaching. So for many, pensions were their only source of retirement income.

This week, the governor's office said Aon, the consulting firm providing guidance to STRS Ohio, has severed its contract.

"The unstated implication is that the governance issues at STRS are so concerning that Aon could not continue its contract in good faith," said DeWine in a statement.

Local 12 asked Aon why it pulled out of the contract, the company declined to comment.

In 2023, Governor Mike DeWine removed his own appointee, Wade Steen, from the teacher's retirement board.

In a statement, DeWine said he removed Steen from the board because Steen had missed some meetings.

He also had concerns that Steen was "acting as an advocate for a specific investment firm at the expense of a thorough, competitive and public process."

ORTA said the governor made it right before the board's election results were announced, and if Steen had remained on the board, it would have been majority reformers.

Earlier in 2024, a court ruled that Governor DeWine did not have the authority to remove that member from the board, so Steen returned to his seat.

The 2024 board election wrapped up on Monday, May 6, and results will be announced on May 11. Some "reformers" believe this was a reason the investigation was announced this week.

By Chelsea Sick, WKRC

May 10, 2024



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