COLUMBUS, Ohio – Governor Mike DeWine has taken a significant step in addressing concerns regarding the State Teachers Retirement System in Ohio by providing state investigators with a collection of documents that he believes may reveal potential misconduct. This move comes amidst a battle for control of the pension system, which recently saw DeWine involved in a court dispute over a board seat.
The situation escalated when Aon, an Irish consulting firm with offices in Chicago, notified the retirement system of its intention to terminate its contract to assist with governance matters. DeWine, alarmed by this development, wasted no time in escalating his concerns by sending the documents to the Ohio State Ethics Commission, Ohio Attorney General Dave Yost, and other officials for further investigation. The documents point to a possible hostile takeover of the pension system by private interests, raising red flags for DeWine.
With a pension worth approximately $94 billion, the State Teachers Retirement System has been under scrutiny for years regarding its management of the retirement fund and the financial challenges faced by retirees. A group of retired teachers even hired a pension expert to investigate fees paid to Wall Street money managers for various investments, including private equity and real estate.
The turmoil within the pension board has also led to changes in its composition, with power tipping back and forth between reformers and other members. This ongoing struggle for control has resulted in legal battles, changes in board membership, and conflicting visions for the future of the pension fund.
The recent departure of Aon as a consultant further complicates matters, as the consulting firm was hired following a 2022 audit that highlighted governance issues within the pension system. DeWine’s statement regarding Aon’s exit suggests that the governance issues at STRS are so alarming that the consultant could not continue its services in good faith, potentially putting the system out of compliance with audit recommendations.
The documents forwarded by Governor DeWine shed light on allegations of questionable conduct within the pension system, including concerns about investment decisions and potential conflicts of interest. The ongoing saga surrounding the State Teachers Retirement System reflects broader challenges within the public pension sector, highlighting the need for transparency, accountability, and effective governance to safeguard retirees’ financial security.
In light of these developments, it is clear that the State Teachers Retirement System in Ohio faces significant challenges that require thorough investigation and decisive action to ensure the long-term stability and viability of the pension fund. Governor DeWine’s decision to escalate the matter to state investigators underscores the importance of addressing potential wrongdoing and restoring trust in the system for the benefit of all stakeholders.