COLUMBUS, Ohio – Ohio Attorney General Dave Yost has launched an investigation into the activities of the state teachers’ pension board and whether it should be fired for breach of fiduciary duty.
In a statement Thursday, Yost said he was particularly focused on concerns that the board is susceptible to “hostile takeovers by private interests.”
Yost did not mention private interests or name any board members who might be removed.But he referred to state law This gives the commissioner the power to bring civil lawsuits against state pension commissioners who violate their fiduciary duties, which could result in their removal from office.
read more: DeWine raises ‘red flags’ about Ohio teachers’ pensions after new board takes office, consultant retires
The $94 billion State Teachers Retirement System board has been in turmoil for years. Most recently, Ohio’s 10th District Court of Appeals ruled that Wade Steen, the board member Gov. Mike DeWine ousted a year ago, should be reinstated.
Mr. Steen, along with several new board members, was considering major changes to the pension’s operations. Many retirees rebelled against the board after not receiving annual cost-of-living raises from 2017 to 2022, saying the cost-of-living hikes caused hardship because their pensions were based on their modest salaries in the classroom. insisted. No other national pension system has taken such severe austerity measures.
But DeWine, who removed Steen from the board last year, announced late Wednesday afternoon that he had sent more than a dozen letters to Yost and other state officials. It included documents that showed Mr. Steen and some other board members appeared to have been influenced by federal leaders. We are a relatively new company and have no experience investing in pensions. Such a “hostile takeover by private interests” was mentioned in an unsigned memo that was part of those documents.
One of the leaders of QED, a relatively new company, was Seth Metcalfe, who served as Ohio deputy treasurer under Ohio Treasurer Josh Mandel.
DeWine’s staff believes several STRS employees were dispatched to his office to notify them of the issue, according to the anonymous letter, which said the company rolled out an AI investment strategy to STRS officials in 2020. Then he told her. This letter is included in the documents sent to Yost.
In 2020, Metcalf requested between $25 billion and $45 billion in STRS assets. In 2021, Metcalf and his partners told STRS’s executive director and another leader that they needed $65 billion in assets to fully implement the strategy.
This came amid board-imposed austerity measures, with board members such as Steen seeking to restore annual cost-of-living increases. The anonymous letter claimed that Mr. Steen had been using QED’s charts of the fund’s performance, which were inaccurate.
Cleveland.com/The Plain Dealer has reached out to Steen for comment.
A group of former retirees called the Ohio Association of Teacher Retirees has long criticized STRS’ actions and has helped raise money to cover Mr. Steen’s legal costs in his fight to regain a seat on the STRS board, it said Wednesday. he said in a statement tonight. This battle is about the direction of the pension system.
With Mr. Steen’s return to the STRS board, the board now has a majority of reformers. According to pensions and investments.
“Reformists have won ideological battles through fair and democratic processes in the past six elections,” the group said in a statement. “Teachers voted for reform because reform is desperately needed. Our actions to support reform were legal, ethical, and necessary. This anonymous letter is just sour grapes from the losers. ”
Laura Hancock covers state government and politics for The Plain Dealer and cleveland.com.
