State 'really needs transparency'

A start-up financial firm that tried to land business with the State Teachers Retirement

System of Ohio is criticizing the pension staff

A start-up financial firm that's been trying to get business with the State Teachers Retirement System of Ohio is going on offense, attacking the pension fund's previous administration.

STRS Ohio never did due diligence on the firm, QED, and instead, pension managers launched false claims to discredit the company, according to Seth Metcalf, a co-founder of QED.

"Ohio really needs transparency, increased oversight and full accountability right now," said Metcalf, who served eight years as a top official in the state treasurer's office under Republican Josh Mandel.

STRS, one of five public pension funds in Ohio, oversees about $95 billion invested on behalf of 500,000 teachers and retirees.

STRS said the firm didn't pass a vetting done by the pension investment staff in 2020. In early 2021, the pension fund's consultant, Cliffwater, highlighted a number of concerns, including QED’s lack of clients, assets and experience, and recommended against further engagement. QED backed away in 2021.

STRS Interim Executive Director Aaron Hood recently told lawmakers: “There is no appetite on behalf of the system to engage with that particular investment strategy.”

But Metcalf says QED didn't get a chance to go through the formal due diligence process, which includes a detailed questionnaire and comprehensive financial modeling. Instead, it got smeared because QED asked uncomfortable questions about STRS operations, he says.

"They made stuff up about us. They lied. They were out to discredit us because we caught them with their hands in the cookie jar," Metcalf said. "This was the first of many lies. They misled the governor and the attorney general. And, yes, we're going to tell our story."

Metcalf hasn't ruled out QED doing business with STRS in the future but said his focus now is "setting the record straight."

Ohio's second largest pension fund has been gripped with drama over the past five years.

Retirees are angry that STRS interrupted cost-of-living allowances but paid out pension fund employee bonuses, even in years when the system lost money.

Against this backdrop, QED began contacting STRS board members and administrators in 2020. Metcalf and QED co-founder J.D. Tremmel questionedSTRS' investment fees and reported returns and pitched its own investment services.

Matt Worley, STRS' then chief investment officer, rejected QED, telling the new firm to come back in a year.

But, according to court records, QED went around STRS' top staff and worked directly with board members Wade Steen and Rudy Fichtenbaum. The two men pitched a partnership with QED at a board meeting in November 2021 but a majority of the board wasn't interested.

At the same time, the Ohio Retirement for Teachers Association and STRS Watchdogs pushed to change the makeup of the 11-member pension board.

Over a series of elections, control of the board now lies with reformers, who have advocated for improved benefits for retirees and teachers, new staff and a willingness to examine alternative investment strategies. Election results announced in May further solidify the reformers' hold on the board.

In the latest twist, Gov. Mike DeWine, Senate President Rob McColley, House Speaker Matt Huffman and Treasurer Robert Sprague co-signed a letter to the STRS board asking it to hold off on hiring a new executive director. Lawmakers have started exploring how other states structure their teacher pension boards.

The STRS board meets May 14-16 and is scheduled to consider filling the director post, which has been held by interim executives since November 2023.

By Laura Bischoff Columbus Dispatch May 14, 2025

Read this article online at https://www.dispatch.com/story/news/state/2025/05/13/strs-ohio-pension-fund-criticized-by-investment-firm-it-rejected/83513688007/

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