Worried about a potential conflict of interest, attorney general Jim Petro first proposed that he be removed from the pension boards this summer. In total, the newest version of the proposal would grant three state agencies new authority to investigate wrongdoing at Ohio’s five state retirement systems, according to a Cleveland Plain Dealer report.
The attorney general’s regulatory role is just the latest amendment to a reform bill that has been in the works since last month aimed at subjecting the state’s public employee pension funds to more ethical, legal, and financial scrutiny (See Ohio Lawmakers Drafting Pension Reform Bill ). Other p ossible provisions of the bill include:
- authorizing the Ohio Retirement Study Council – a legislative oversight committee – to hire a criminal investigator to examine spending at the five funds
- require the filing of financial disclosure statements with the Ohio Ethics Commission for all pension board members and certain staff members
- require regular performance audits of each retirement system
- ethics and travel policies for all five public employee funds
- provisions to remove pension board members who misspend money
- give retirees more representation through a change in the composition of several fund boards.
- all pension investment officers would have to be licensed by the Ohio Division of Securities. The division would get new authority to investigate them.
Wachtmann is scheduled to unveil the proposal at a news conference today. If all goes according to plan then, the Senate Health, Human Services & Aging Committee, which Wachtmann serves as chairman of, will being hearings on the bill within the next few weeks.
The move by lawmakers to introduce reform bills came after questions were raised earlier in the year about the spending practices at the State Teachers Retirement System (STRS). Among the alleged excessive expenses incurred by the fund were:
- a $94.2-million office building adorned with $869,000 in artwork
- generous fringe benefits for STRS employees
- frequent out-of-state travel for pension board members
- $14 million in employee bonuses.
At the time, then-STRS Executive Director Herb Dyer said the pension board was trying to recruit and keep good investment staff in a competitive profession that pays well and offers good benefits. “I appreciate that people who don’t do that kind of work for a living might not understand it, but that’s the reality of the professionalism involved,” said Dyer (See Ohio Pension Fund Hit for Lavish Spending Practices) .