(The Center Square) – Ohio Attorney General Dave Yost opened an investigation Thursday into the State Teachers Retirement System, saying the move is an effort to protect teachers’ retirement accounts.
Yost says the action is in line with rooting out public corruption and instances of greed and deceit within public institutions.
“Pension board members are required by law to act in the best interest of the teachers whose money they invest,” Yost said. “I will take whatever action is necessary to protect teachers against private interests attempting to hijack their retirement accounts. This isn’t monopoly money; it’s hard-earned income that belongs to teachers. There is a responsibility to act in their best interests.”
According to a news release, Yost’s office received documents that contained allegations relating to the retirement system board, allegations he called disturbing. He also said there are concerns the system is susceptible to a hostile takeover by private interests.
The retirement system handles the $90 billion teacher pension for 500,000 current and retired teachers.
“Recent audits demonstrate that STRS Ohio is well-run and that the pension fund is in sound financial position. Questions raised involve board governance. Teachers in the classroom and retired educators should know their pension is safe and secure,” Kim Donald, members services of STRS Ohio, said in an email to The Center Square. “STRS Ohio will continue to protect the stability and integrity of the organization and will fully cooperate with all offices in their review of the pension system.
The documents, which were sent to the attorney general’s office unsigned, say the retirement system has been the target of QED Systematic Solutions LLC, a private investment entity, for the past four years. The documents say QED is led by former Ohio Deputy Treasurer Seth Metcalf, Jonathan Tremmel and leadership of the Ohio Retired Teachers Association.
The Ohio Lobbying Activity Center lists Metcalf and Tremmel as agents for QED Technologies LLC.
Yost’s investigation comes less than 24 hours after Gov. Mike DeWine called for investigations by the attorney general, the Ohio Ethics Commission and the state auditor.
Based on a recommendation from Auditor Keith Faber, the retirement system retained national consulting firm Aon for guidance and corporate governance, according to DeWine.
“Recently, we learned that Aon is severing its contract with STRS,” DeWine said. “This is a huge red flag, calling into question how STRS is operating and providing oversight. The unstated implication is that the governance issues at STRS are so concerning that Aon could not continue its contract in good faith. STRS may now be out of compliance with portions of audit recommendations due to Aon ending the contract.”
Last year, DeWine removed retirement system board member Wade Steen, who was reinstated to the board by court order last month. Also, the board voted in November to place Executive Director Bill Neville on paid leave after an anonymous letter accused him of misconduct.
