Buckeye State Lawmakers Hash Out Pension Reform Pact

May 25, 2004 (PLANSPONSOR.com) - Ohio state lawmakers have hashed out a compromise on increasing oversight of the Buckeye State's public employee retirement system just days after an ethics report alleged criminal wrongdoing at the Ohio Police & Fire Pension Fund.

The House Banking, Pension and Securities Committee is scheduled to vote on the bill Tuesday. Lawmakers plan to send the bill to Governor Bob Taft by the end of the week, when the General Assembly adjourns for the summer, according to the Cleveland Plain Dealer.

Pension reform has been stalled since the House and Senate passed competing bills late last year. The major sticking point was a House proposal to require the retirement systems to use Ohio-based brokers and money managers for a majority of their equities trades. Under the deal, the systems would have to develop goals to increase the use of Ohio-based brokers and money managers, but would not be forced to set aside a specific amount of their business for Ohio firms.

The legislation was sparked by newspaper reports about questionable spending at the police and fire pension fund, and the State Teachers Retirement System (See  Dyer Steps Down From Ohio STRS Post ). The bill would require pension boards to adopt ethics and travel policies, and it would require board members and investment staff to file financial disclosure statements with the Ohio Ethics Commission.

The bill also addresses some of the allegations involving the Ohio Police & Fire Pension Fund by requiring people who lobby Ohio’s five public-employee retirement systems to register as lobbyists and to report gifts to officials (See  Ohio Pension Officials Could Face Felony Charges ). The Ohio Ethics Commission’s investigation report says that four management services companies provided more than $200,000 in meals, entertainment, excursions, golf and overseas travel to trustees, staff, relatives and friends at the Ohio Police & Fire Pension Fund from 1998 to 2003. The companies were paid a total of $33 million in fees by the pension fund.

The Ethics Commission also is investigating the State Teachers Retirement System. That investigation is expected to be completed this summer.