DeWine calls for investigation into Ohio’s teacher retirement system

COLUMBUS, Ohio (WCMH) – Years after concerned retirees demanded reform of the State Teachers Retirement System (STRS) board, Ohio Attorney General Dave Yost is launching an investigation Thursday at the governor’s request.

Gov. Mike DeWine asked for investigations by the Ohio Ethics Commission, the attorney general, and the state auditor. The STRS board is in turmoil after board member Wade Steen, who was removed by DeWine last year, used a court order to reclaim his seat last month. Board executive director Bill Neville is on leave after an anonymous letter accused him of misconduct.

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In an exclusive interview, DeWine said an anonymous memo alleges a hostile takeover of the public pension by private interests.

“It raised some really serious concerns, you know, certainly inferred some self-interest by some of the board members, but I’m not going to judge that,” DeWine said Wednesday. “My job, I think, was to turn that over to the appropriate authorities. I think the big question here, what everyone wants, what everyone should want, is stability on the board.”

But chaotic is a better word to describe the most recent meeting of the STRS board. After Steen used that court order to reclaim his seat, the board president abruptly ended the meeting, with half the agenda undone.

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Now comes word that the company hired by STRS to help with governance problems, Aon, left in the middle of its contract, refusing to work anymore with STRS.

“The group that was hired, a very real well-respected group to help the board make those decisions, pulled out and said, you know, we don’t want to be part of this anymore, which I think raises a red flag for everybody: ‘what is going on?’” DeWine said.

When asked about bonuses awarded to the investment firms while revenue for the fund plummeted and building expenses, DeWine said those weren’t the reasons Aon pulled out.

“You know, I don’t think that’s the issue here,” he said. “Those are certainly concerns. You know, I have expressed my belief that you know, we should do everything that we can so that retired teachers, you know, first, their money’s protected, but second, that they get a cost of living. But I think this issue is, you know, goes to the governance of the board itself.”

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The struggle for power at STRS has largely been led by angry retirees who claim Steen is trying to help them by restoring cost-of-living hikes, protecting their investments, and slashing exorbitant staff bonuses.

But the anonymous memo accuses Steen and the Ohio Retirement for Teachers Association (ORTA) of aligning with a private investment group to take control of board elections and then the $65 billion in investments.

“But it scares me, frankly, and I think, you know, we need to have some stability on that board and the board certainly needs to get another company in there to help advise them about that governance itself,” DeWine said.

Steen denied being part of an effort by a private investor, QED, to take control of the pension fund.

“There is absolutely no truth to that,” he said. “There was never an effort to take control of the pension.”

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As for accusations of a hostile takeover through elections, Steen said, “There are 500,000 active and retired members who use a fair and open election process to select whoever they want to represent them.”

ORTA also replied to the memo, stating the board’s current direction was determined in the fair election of members.

Its statement reads:

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