COLUMBUS, Ohio — The largest educator unions across Ohio filed a lawsuit against the state for removing their voices from the retired teachers' pension fund.
On Tuesday, Ohio Education Association (OEA), the Ohio Federation of Teachers (OFT), and the Ohio Conference of the American Association of University Professors (OC AAUP) sued the state, arguing the State Teachers Retirement System (STRS) board changes are "unconstitutional and discriminatory," according to a press release.
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“This policy is the latest in a long line of attacks against educators in Ohio,” said Glenetta Krause of Cincinnati Public Schools in the press release. “Statehouse politicians have underfunded our public schools, rolled back our collective bargaining rights, fully eliminated Ohio’s elected State Board of Education, and told us what we can and can’t teach. Now they’re taking away our representation on our own retirement board. This lawsuit is about restoring fairness and protecting our fundamental right to have a say in how our retirement is managed.”
A last-minute provision in the state budget changed the makeup of the board from seven elected teachers — five contributing and two retired — to three elected, after seats are phased out over several years. Two of the educator seats will be for active educators, and only one retiree seat will be available.
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Under the current statute, signed into law by Gov. Mike DeWine, those four removed educator seats will be filled with newly appointed members. Right now, the governor gets to appoint one investment expert. The Speaker of the House and the Senate President jointly appoint an expert. The treasurer gets an appointee, and so does the director of the Department of Education and Workforce.
Eventually, the treasurer will get two appointees, the legislative leaders will get one each and one combined, equalling three. The chancellor of the Department of Higher Education will get one, and the governor and the Department of Education and Workforce each get one.
The lawsuit alleges that the policy violates educators’ right to equal protection under the law because only STRS was changed, not the other four Ohio public employee pension funds. The educators also take issue with the manner in which the provision was passed, without having it be considered on at least three different days, and that it was included in legislation that was more than one subject. The budget, which was thousands of pages, covered everything from tax policy to STRS to LGBTQ+ rights.
Lawmakers made the decision due to the past year of controversy, they said.
"The state legislature established these pension systems and has an ongoing responsibility to ensure the long-term health of the fund for retired and active teachers," state Rep. Adam Bird told me back when the changes were proposed. "The ongoing turmoil has clarified the need for the General Assembly to rebalance the Board composition."
House Finance Chair Brian Stewart (R-Ashville) was among those unhappy with how the pension fund has been run.
"I think there's been pretty widespread concern about some of the management of the state teachers' retirement system," Stewart said during the budget process.
News 5's extensive reporting was cited in the press release.
In summary, there has been constant fighting, two board resignations, and allegations of both public corruption schemes and the mishandling of funds. There has been a senior staff dismissal and at least two senior staff resignations.
A 14-page whistleblower memo given to DeWine in May alleged a massive public corruption scandal brewing and moving quickly within STRS.
Attorney General Dave Yost soon after filed a lawsuit to remove former members Wade Steen and Rudy Fichtenbaum from the board, stating they were participating in a contract-steering "scheme" that could directly benefit them.
The lawsuit accuses the pair of "colluding" with investment startup QED Technologies, run by former Ohio Deputy Treasurer Seth Metcalf and Jonathan (JD) Tremmel, to secure a contract giving them 70% of the STRS assets — about $65 billion at the time. The memo accuses QED of helping to elect board members who may be more sympathetic to their proposal.
We have continued investigating the alleged scheme throughout the past year — including an interview with DeWine.
He expressed his deep concerns following our April 2025 report in which we revealed hundreds of text messages about the relationship between Steen and members of QED:
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Steen and Fichtenbaum have continued to maintain their innocence, arguing that Yost and DeWine are part of a "political scheme" to prevent educators who want more transparency and to change the investment structure. The men are seen as the leaders of the "reform movement."
This fight began from a debate on how STRS should invest money through the current system of actively managed funds versus an index fund. Active funds try to outperform the stock market, have more advisors, and typically cost more. Index funds perform with the stock market, are seen as more passive, and typically cost less.
In short, "reformers" want to switch to index funding, while "status quo" individuals want to keep actively managing the funds. Recent elections have allowed the "reform-minded" members to have a majority of the board.
Steen and Metcalf, the men with the relationship at the center of the conversation, also spoke with me in response to the governor’s comments in their own Q&A that can be found here.
Follow WEWS statehouse reporter Morgan Trau on Twitter and Facebook.
