The board of the $47 billion pension fund accepted the negotiated settlement on a 5-3 vote. The move was necessary, said chairwoman Deborah Scott, because confidence in the system has eroded, according to an Associated Press report.
Per the terms of the settlement, Dyer will step down from his executive director post in exchange for $550,000 in salary, benefits and accrued vacation and sick leave. Board members representing the state auditor, attorney general and state school board voted against the agreement, citing the amount of money Dyer would receive.
However, the board realized that removing Dyer would not come cheap under the terms of Dyer’s 61?2 -year contract, which does not end until June 30, 2005 and had to be paid out unless the board could have proved “malfeasance, misfeasance or nonfeasance (see Dyer Ousting Could Cost STRS Big Bucks ).”
Pressure had begun to mount on not only Dyer but also the entire board for questionable spending on director bonuses, artwork purchases and travel over three years (See Ohio Pension Fund Hit for Lavish Spending Practices ). While the board was paying $15 million for these expenses over that time, the system’s investments plummeted by $12.3 billion and health care contributions by retirees jumped significantly.
However, it was the escalating retiree health-care costs and Dyer’s self-admitted insensitive remarks that signified the beginning of the end for Dyer. Among the comments that landed Dyer in the middle of criticism, was a letter written to one retiree that the teachers’ pension fund belongs to STRS board members “to distribute as they see fit (see Ohio STRS Executive Director Offers Apology To Retirees ).”
STRS oversees pensions for 424,171 teachers and retirees.