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  • STRS Ohio Watchdogs

Blade Editorial: Pension chief suspended


NOV 21, 2023 9:00 PM

The State Teacher Retirement System of Ohio Board of Trustees has suspended Director Bill Neville while Attorney General Dave Yost brings in outside counsel to investigate claims of managerial abuse by Mr. Neville.

The suspension has gotten all the attention, but a legal filing in the challenge to Gov. Mike DeWine’s dismissal of his board appointee may be more important.

An anonymous STRS staff letter that went to Mr. Yost accuses Mr. Neville of violence, verbal abuse, and sexual harassment. It cannot be credibly investigated while Mr. Neville presides at STRS, so he’s on paid leave.

Mr. Neville has been under fire from angry teachers and dissident board members for treating STRS investment staff too well. That is what caused Mr. DeWine to dismiss his appointee Wade Steen.

Mr. Steen had led an effort to oust Mr. Neville over payment of bonuses to investment staff despite a $5 billion market loss.

With the election of a dissident board member set to take office in September, Mr. Steen’s board faction would have a majority — if Mr. Steen was still on the board.

Mr. Steen filed suit over his dismissal. His attorney, Toledoan Norman Abood, argued that the governor does not have the power to remove a board appointee without good cause because an appointee who serves at the pleasure of the governor would not be a fiduciary if he or she can be removed at the whim of said governor.

This issue is of far-reaching significance. Ohio law on the public pensions makes it crystal clear the trustees are fiduciaries of the fund.

And, the law spells out how and why a trustee can be removed from office before their fixed term expires.

But Attorney General Yost’s special counsel filed an argument Friday asserting the governor has nearly unlimited power to fire his appointees.

The special obligation of an appointed fiduciary is not even addressed in the AG’s argument.

Mr. Steen opposed STRS investment policy and was attempting to steer the fund away from high-cost alternative investments. Governor DeWine replaced Mr. Steen with G. Brent Bishop, a private equity executive supportive of the status quo.

Ohio’s pension portfolio is becoming a political controversy. The teachers pension is seeking a $500 million annual increase in taxpayer contributions and the Ohio Police & Fire Pension and the Ohio Public

Employees Retirement System also want big hikes that will add more than a billion dollars a year.

In 2022, the Ohio pensions lost more than $32 billion. High-cost, high-risk investments get much of the blame, yet the governor and AG signal that trustees who ask questions are subject to immediate dismissal.

Mr. Neville’s status as director of STRS may or may not outlast the AG’s investigation. Of more importance is ensuring a STRS board that acts as fiduciaries of the fund, not as yes men or women for the governor.

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