COLUMBUS, Ohio (WCMH) – Financial relief could be on the way as soon as Thursday for Ohio teachers when their pension board votes on a plan to make active teachers pay less into the pension system while giving retired teachers more money in a one-time cost of living increase.
The promised annual cost of living hikes for retirees ended seven years ago, with retirees claiming the State Teachers Retirement System is being mismanaged.
Ohio Sen. Hearcel Craig is one of the members of the state’s pension oversight council, which oversees five public pension systems with a combined $218 billion in assets benefiting state workers including teachers, police, and firefighters.
By law, each of the pension systems must be audited at least once every 10 years. For teachers, there has not been an audit in 16 years.
“It’s difficult to debate with you this issue of why it’s taken so long,” Craig said. “I think the workers certainly deserve, our state workers and our retirees, a system that is solvent both for those that are retirees and the workers that are currently working.”
Craig said an audit will be conducted this year.
The three state senators, three state representatives, and three governor appointees on the Ohio Retirement Study Council are supposed to receive regular reports from pension directors, but individual pension losses might not come to their attention.
For example, STRS lost $525 million in a single investment when a private equity fund known as Panda Power went bankrupt.
An STRS spokesperson said the loss was absorbed on the books over several years.
“The Panda Power returns were kind of absorbed over various years,” said STRS spokesperson Nick Treneff. “There wasn’t one year where that went from a large value to zero.”
Craig said he was not aware of the Panda Power loss.
STRS insists its investments are performing well after taking a hit during the 2008 recession. However, there is no audit to prove that.
Ohio Attorney General David Yost said his office regularly pursues losses for public pension systems if there has been falsification or foul play on the part of the investment company. However, even if there is wrongdoing within one of the five public pension systems, it likely would not come to his attention.