At Ohio's second largest public pension system, board meetings are marked by contentious fights, its high-paid executive director is on indefinite leave, and reformers pushing for wholesale changes appear ready to take majority control.

In another sign of turbulence at the State Teachers Retirement System Ohio, Aon Consulting, a national firm, canceled its contract early. STRS hired Aon in September to provide governance guidance.

STRS Ohio, which controls $90 billion invested on behalf of 500,000 Ohioans, is run by an 11-member board made up of appointees and elected teachers and retirees.

Teachers are in the midst of electing a board member to replace the outgoing STRS Chairman Dale Price. The outcome could tip control of the board. The candidates are Michelle Flanigan, a government teacher at Brunswick City Schools, and Sandy Smith Fischer, an intervention specialist at Streetsboro City Schools.

Election results will be announced May 11, less than a week before the next STRS board meeting. Voting by phone, internet and mail closes at 4:30 p.m. May 6.

The meeting in April was filled with drama.

In the middle of the meeting, the 10th District Court of Appeals issued a decision reinstating Wade Steen to the STRS board. Gov. Mike DeWine removed Steen a year ago, prompting Steen to sue. Steen made a triumphant return, entering an executive session and announcing that the governor's other appointee had to leave.

Steen is aligned with the Ohio Retirement for Teachers Association, which has been pushing for wholesale changes.

The Ohio Retirement for Teachers Association held fundraisers to pay Steen's legal fees as he fought to get back on the board. That arrangement could conflict with Ohio ethics laws, said Ohio Ethics Commission Director Paul Nick. A previous ethics opinion said outside entities can't pay the legal defense fund for public officeholders.

Steen is chief financial officer for Cleveland Metro Parks and the former Franklin County treasurer. Former Gov. John Kasich first appointed him to the STRS board and DeWine reappointed him before replacing Steen later.

What do the reformers want in the pension system?

The Ohio Retirement for Teachers Association and its allies on the board are pushing for several changes. They want to reinstate regular cost of living adjustments for retirees, cut down on administrative expenses and staff bonuses, dial back on higher-risk investments such as private equity funds, and increase transparency.

Some have lost confidence in William Neville, who has been the STRS executive director since 2020. In November, an anonymous letter purporting to be from STRS staff accused Neville of harassment and unprofessional behavior. An outside law firm hired to investigate the claims said in February that it couldn't find evidence to substantiate most of the allegations.

Rather than reinstate Neville, who hired an attorney, the board voted to keep him on leave through mid-May and ordered him to take professional development. He is paid $318,000 a year and his contract runs through June 2027.

Investment strategies

A few years ago, Steen and another STRS board member, Rudy Fichtenbaum, said they've listened to an investment pitch made by Jonathan Tremmel and Seth Metcalf, a former top aide in the state treasurer's office under Republican Josh Mandel.

Metcalf registered QED Management and OhioAI with the Ohio Secretary of State on Oct. 6, 2020. Tremmel registered QED Technologies on March 19, 2019.

In November 2021, Fichtenbaum, Steen and former board member Bob Stein suggested that STRS Ohio explore going into business with QED Management LLC and name the partnership Ohio AI. But board members at the time rejected the idea as untested and too risky.

Metcalf later accused the STRS management of misdeed and running a smear campaign against QED.

Laura Bischoff is a reporter for the USA TODAY Network Ohio Bureau, which serves the Columbus Dispatch, Cincinnati Enquirer, Akron Beacon Journal and 18 other affiliated news organizations across Ohio.

This article originally appeared on The Columbus Dispatch: Ohio's teacher pension fund faces major challenges and changes