The interim leader of the pension fund that manages $90 billion for half a million current and retired teachers in Ohio said she will be retiring at the end of the year. That creates another challenge for the State Teachers Retirement System, which announced a $1.65 million exit settlement with executive director Bill Neville on Tuesday.
“I am at the near end of my career. I was hoping to be able to leave a good legacy," said interim executive director Lynn Hoover at the STRS monthly board meeting last week. This week, Hoover announced she won't return after her contract expires in December.
Along with Hoover, the fund's chief investment officer Matt Worley announces his resignation, effect in March.
These are just the latest developments in a chaotic year for STRS.
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Board members backed by the Ohio Retired Teachers Association claimed a majority on the board in May, and elected Rudy Fichtenbaum chair. Just hours before that meeting, a lawsuit was filed by Republican Attorney General Dave Yost to remove Fichtenbaum and Wade Steen.
Yost claimed the two "seek to steer as much as 70% of STRS’s current assets (about $65 billion in teacher pension funds) to a shell company that lacks any indicia of legitimacy and has backdoor ties to Steen and Fichtenbaum themselves."
The lawsuit was sparked by an anonymous memo claiming corruption and suggesting Steen and Fichtenbaum were working with QED, a private investment company co-founded by Seth Metcalf, the former deputy state treasurer under Treasurer Josh Mandel. It's believed the letter was prepared by STRS staffers. Steen returned to the board in April at the order of the Ohio Supreme Court. He had sued after he was removed by Gov. Mike DeWine over concerns about Steen's relationship with QED.
The issue for the retired teachers is investments. Other pension funds have paid cost of living allowances but STRS didn’t for five years, and now pays a COLA but has frozen increases. Teachers say they want more transparency and a different investment strategy, moving to passive management in index funds.
Hoover was in an interim leadership role because Neville was on leave. He had been suspended in November after staffers accused him of violent behavior and sexual harassment. He has since been cleared of those allegations, but board members chose to keep him on administrative leave because of concerns about leadership.
In June the board voted 5-4 not to award $10 million in performance bonuses to investment staff, but said it would discuss bonuses at a later meeting.
