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  • STRS Ohio Watchdogs

Paid leave for pension fund's executive director extended again

The executive director of the state's pension fund for teachers, who has been on paid administrative leave since November, will remain so through June 30.


Bill Neville, director of the State Teachers Retirement System since 2020, was placed on leave by the board following receipt of anonymous allegations accusing him of creating a hostile work environment.


A subsequent investigation by an outside firm determined more than a month ago that there was no evidence of "unlawful workplace conduct" on Mr. Neville's part, but he remains on leave while drawing his $318,000-a-year salary.


He was required to complete a program offered by Stanford University, which his attorney, Rex Elliott, said he did. Mr. Neville's leave was to expire on Friday. The extension carries his leave through the end of the current fiscal year, but Mr. Neville's contract extends three years beyond that.


The board voted 9-2, with no discussion, to extend his leave a second time.


"At the end of the day, we have an executive director, Bill Neville, who did a fantastic job...," his Columbus attorney, Rex Elliott, said. "Then a bogus email comes along. It's proven unfounded, but he still sits without a job. It's crystal clear there's some dysfunction on the board that's keeping him out.”


Further muddying the waters, the same board vote authorized the system to enter into a contract with Lyn Hoover, the chief financial officer who has served as acting executive director in Mr. Neville's absence. She will now serve as chief of staff from July 1 to Dec. 31, 2024, with her duties remaining the same as they are now.


Mr. Neville's suspension occurred in the midst of board in-fighting that culminated this week with a new 6-5 majority favoring so-called "reformers" backed by some angry retired teachers.


The board on Wednesday elected one of those reformers, retired Wright State University economics professor Rudy Fichtenbaum, as chairman, replacing Toledo Public Schools math teacher Dale Price.


At the urging of Gov. Mike DeWine, Attorney General Dave Yost this week sued to remove Mr. Fichtenbaum and recent returnee Wade Steen, who was initially appointed by the governor as his investment expert on the board.


The lawsuit accuses both of violating their fiduciary responsibilities by promoting an investment proposal that STRS staff and consultants consider untested and risky.


That led to a debate by the board Thursday about who should pay the legal fees to defend Mr. Steen and Mr. Fichtenbaum against Mr. Yost's lawsuit.


A representative of the attorney general's office who advises the board noted that state law allows public officials to request representation. Mr. Yost would decide whether they're eligible.


If deemed eligible, both the lawsuit and the defense could proceed independently within the attorney general's office.


Mr. Steen questioned how his own legal fees could not be paid when the state defended G. Brent Bishop and Brian Perera against Mr. Steen's litigation to regain his seat. The two men, at different stages, served on the board in Mr. Steen's place after Mr. DeWine removed him from panel, a decision the 10th District Court of Appeals later said he had no authority to do.


"I was illegally removed, because the court decided that it was illegal...," Mr. Steen said. "The two people who sat in the chair illegally have legal fees paid. I'm just wondering where I stand."

STRS is the second-largest public employee pension fund in Ohio and one of the largest in the nation . It had $91 billion in assets and nearly 540,000 active, inactive, and retired members as of June 30.


Some members of the board also called for an investigation into who within STRS wrote the anonymous memo that has served as the basis for Mr. Yost's lawsuit. No vote was taken.

The current reformer majority is expected to be further solidified when newly elected active teacher Michelle Flanigan replaces Mr. Price on the board on Sept. 1.


Some retired teachers have been angered over the loss of their annual cost-of-living adjustments in their benefits, have questioned the board's investment decisions, and sued to force release of records pertaining to those decisions. They have condemned performance bonuses paid to in-house investment staff.


If only to set a tone at this point, the board voted — with just two negative votes — to have its actuarial consultant look sooner than normal at whether the system will be able to afford to help retirees counter the effects of inflation next year. That consideration will occur in November.


The board also discussed the contentious issue of performance bonuses for investment staff.


"The issue with our ability to do everything that we want to do for teachers is not really constrained as much by the investment performance as it is by the demographics...," said Alison Lanza Falls, appointee of Ohio Treasurer Robert Sprague. "The biggest constraint is...we have a negative $4 billion cash outflow because we have declining student populations, we have a growing number of retirees, and we have a declining pool of teachers.”


By Jim Provance The Blade May 16, 2024




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