Ohio’s Republican attorney general is suing to remove two members from the board of the state teachers’ pension fund. One of them was voted in as chair of the State Teachers Retirement System board last week, as members backed by retired teachers claimed a majority on the board.
But AG Dave Yost said he’s on the side of those retirees, and has some of the same questions they do.
Retired teachers angry they didn’t get cost of living raises for five years voted in STRS board members who want more transparency and changes to the fund. Members backed by retired teachers or have publicly voiced the same concerns as retirees gained a majority on the STRS board this month. That prompted the state's lawsuit.
"I do hope that the board recognizes that there are some serious considerations here, that we're trying to protect the teacher retirees and the system, and that they will be cautious about proceeding down the road that these two folks want," Yost said.
Yost is suing to remove newly installed STRS chair Rudy Fichtenbaum and board member Wade Steen, both backed by retired teachers. Yost’s suit said they’re trying to put the private investment company QED in charge of most of the fund’s money for their own benefit.
“I'm angry that we've got five retirement systems who participate in the same stock market, and four of them have cost living increases over the last five years. STRS didn't. Those are fair questions," Yost said. “There's something that's not right in the state of Denmark, but steering a public contract and having back door fixes is not the right way of fixing that. It does need to be fixed and the teachers deserve some answers and I intend to get them for them.”
Retired teachers hired former SEC asset management lawyer and forensic investigator Ted Siedle to look into STRS in 2021, which he did through records requests. His 127-page report blasted STRS for a lack of transparency, high fees and underperforming investments. Siedle said he sent the report to Yost along with Gov. Mike DeWine, Auditor Keith Faber, state lawmakers and the Ohio Retirement Study Council. Siedle said he got no response. The auditor's office did a special audit based on Siedle's report, which concluded there was no fraud but that lawmakers should require more transparency about the fund’s investment strategy and its performance incentives for investment managers.
STRS fired back at the report, saying it contained "numerous misstatements and allegations not supported by evidence."
