The following article was originally published in the Ohio Capital Journal and published on News5Cleveland.com under a content-sharing agreement.
After years of complaints about gold-plated salaries, billions in investment fees and lackluster returns, things seem poised to hit the fan at Ohio’s State Teachers Retirement System.
Gov. Mike DeWine on Wednesday issued a press release saying that he was alarmed at the news that a consultant for the $90 billion retirement plan, Aon, was severing its contract.
“This is a huge red flag, calling into question how STRS is operating and providing oversight,” the press release said. “The unstated implication is that the governance issues at STRS are so concerning that Aon could not continue its contract in good faith. STRS may now be out of compliance with portions of audit recommendations due to Aon ending the contract.”
The statement also cited unspecified allegations against members of the pension fund’s board, to which the governor appoints some members.
“Additionally, my office has received documents containing some other disturbing allegations regarding the STRS board,” the statement said. “I have directed my staff to forward these documents to a number of relevant offices, including the Ohio Ethics Commission, the Ohio Retirement Study Council, Attorney General Yost, Auditor Faber, Treasurer Sprague, Secretary of State LaRose, and relevant members of the Ohio General Assembly. I encourage them to review the document and take any action that may be appropriate under any jurisdiction they may have.”
Retirees have long complained of rarely getting cost-of-living increases while the retirement system awarded huge bonuses to already well-paid investment managers. For example, the system in 2022 handed out $10 million in bonuses just before announcing that the system’s investments lost $5.3 billion that year.
Last November, the system’s executive director, Bill Neville, was suspended amid employee complaints of inappropriate behavior.
DeWine himself has fueled some of the controversy at the retirement system. Exactly a year ago, just as reformers were about to achieve a majority on the board, DeWine terminated a reform member.
DeWine said the member, Wade Steen, didn’t attend board meetings regularly enough. But Steen countered that the charge was trumped up. The Ohio 10th District Court of Appeals said DeWine’s termination of Steen was unlawful and ordered that Steen be restored to his position.
The turmoil at the teachers’ pension fund isn’t the only controversy facing the DeWine administration.
DeWine and his lieutenant governor, Jon Husted, haven’t explained their and their staffs’ involvement in an epic utility scandal that featured $61 million in bribes and a $1.3 billion ratepayer bailout as the payoff. A former house speaker and a former state GOP chairman are serving lengthy federal prison sentences in the scandal, which has also resulted in two suicides.
News 5 has been following issues with the STRS for years.
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