In a move unseen in years for the State Teachers Retirement System of Ohio, its board narrowly voted to block bonuses to the investment staff.
In a 5-4 vote Friday morning, reformers now making up a majority on the STRS board took their first decisive action since a legal battle where ousted member Wade Steen fought to get his chair back. The board voted to block at least $10 million earmarked for performance-based bonuses for the STRS investment staff, according to Robin Rayfield, the executive director of the Ohio Retirement for Teachers Association.
Investors working for Ohio’s retired teachers’ pension fund have consistently received annual bonuses ranging from $50,000 to more than $300,000 in the past. The bonuses landed even in the fiscal year ending in June 2022, when the pension fund lost $5.3 billion. In 2023, the board deliberated raising the total bonus budget to $11.1 million.
Steen’s return, as well as Michelle Flanigan’s election to succeed him in September, meant that what active and retired teachers in Ohio called a “mandate for reform” will hold long-term power to make changes at STRS. The group’s demands include transparency on investments, an end to exorbitant bonuses for the investment staff and a return of promised cost of living increases they were denied for years.
The changes aren’t coming without pushback, however. Board members in favor of the bonuses, including Alison Lanza Falls, expressed concerns before the vote that STRS’ investment staff could resign if they didn’t receive the bonuses.
“When people feel they are not being treated fairly, and we’re talking about the investment staff here and I understand the issue with teachers in here as well, but when people do not feel when they have performance and below 60 percentile, at some point they will vote with their feet,” Falls said.
Multiple retired teachers sitting in the audience of the board meeting yelled in reaction to this statement, including the phrase, “let them walk.”
Steen was previously kicked from the board by Gov. Mike DeWine, before appointing G. Brent Bishop to replace him. But at the beginning of 2024, an appeals court determined DeWine overstepped his authority in removing Steen from the position.
Still, the governor called for an investigation into the board, claiming there is a hostile takeover by private interests at STRS. Ohio Attorney General Dave Yost obliged, and called for the removal of Steen and Rudy Fichtenbaum from the board in May. In disclosing findings from his investigation, he accused the pair of colluding to “peddle to STRS a secretive and untested investment scheme” that would “spell disaster for Ohio teachers” — accusations both members emphatically deny.
Rayfield noted that the board scheduled a special meeting in July to discuss what to do about the investors’ bonuses, called PBI, going forward.
Jun 21, 2024 / 11:41 AM EDT
STRS Ohio Board members Rudy Fichtenbaum and Wade Steen are incurring legal fees, defending themselves against the lawsuit brought against them by A.G. Dave Yost. ORTA will use donations from the Pension Defense Fund to help them, if needed, pay their legal expenses. They have volunteered their time to support Ohio's teachers. Now it's time for us to show our support for them! Make a donation today to the ORTA Pension Defense Fund
ORTA advocates for the pensions and benefits of Ohio's educators, demands accountability from STRS Ohio, and lobbies Ohio's legislators to provide a strong and sustainable retirement system. We rely on membership dues to continue our work. Join ORTA!