DeWine calls for an investigation into the state’s teacher pension system

Watch a previous report on STRS in the video player above.

COLUMBUS, Ohio (WCMH) – Years after concerned retirees called for reform of the State Teachers Retirement System (STRS) board, Gov. Mike DeWine is now raising a red flag.

DeWine is calling 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 ousted by DeWine last year, used a court order to win back his seat last month. Chief Executive Bill Neville is on leave after being accused of misconduct in an anonymous letter.

Now, in an exclusive interview, DeWine said an anonymous memo alleges a hostile takeover of the public pension by private interest groups.

“It raised some really serious concerns, you know, and certainly suggested some self-interest on the part of some board members, but I’m not going to judge that,” DeWine said Wednesday. “I think my job was to hand this 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 recent STRS board meeting. After Steen used that court order to win back his seat, the board chairman abruptly ended the meeting and reversed half of the agenda.

Now comes the news that Aon, the company that had hired STRS to help with governance issues, has walked out of its contract mid-term and has refused to continue working with STRS.

“The group that was hired, a very respected group that was supposed to help the board make these decisions, pulled out and said, you know, we don’t want to be a part of this anymore, which I think is a red flag.” all: ‘What’s going on?'” DeWine said.

Asked about bonuses given to investment firms while fund revenues plummeted and construction costs fell, DeWine said those were not the reasons for Aon’s withdrawal.

“You know, I don’t think that’s the problem here,” he said. “Those are certainly concerns. You know, I’ve expressed my belief that we should do everything we can to ensure that retired teachers, firstly, protect their money, but secondly, that they can make a living. But I think this problem, as you know, depends on the leadership of the board itself.”

The fight for power at STRS is largely led by angry pensioners who claim Steen wants to help them by raising the cost of living again, protecting their investments and cutting exorbitant staff bonuses.

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

“But honestly, it scares me, and I think, you know, we need some stability on this board, and the board certainly needs to bring in another firm to advise them on the 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 any attempt to take control of the pension.”

Addressing allegations of a hostile takeover through elections, Steen said: “There are 500,000 active and retired members who choose who they want to represent in a fair and open electoral process.”

ORTA also responded to the memo, stating that the board’s current direction will be determined by a fair election of members.

His statement is:

The reformers have won the battle of ideas in the last six elections through a fair democratic process. Teachers voted for reform because reform is urgently needed. Our actions in support of reform were legal, ethical and necessary. This anonymous letter is nothing more than sour grapes from the lost.