When the new rules go into effect in mid-September, board members and investment officers of each of the state’s five public funds will be required to file annual ethics disclosure statements, according to news reports. Further, each board will have to put an ethics policy into place, to adopt strict policies governing travel and expense reimbursements and to conduct regular financial and performance audits.
Also part of the reform measure was a requirement that a representative of the Ohio’s state treasurer will now sit on the fund boards, along with financial experts appointed by the governor and legislative leaders.
The bill likewise requires that:
- an additional retiree representative be placed on each board
- investment officers for each plan be licensed by the Ohio Division of Securities
- vendors who attempt to influence a fund’s investment decisions will have to comply with Ohio’s lobbying laws.
The bill encourages increased use of Ohio securities brokers and investment managers.
The comprehensive reform package Taft signed into law grew out of the controversy over financial improprieties at some of the Ohio funds. In May, state ethics investigators reported ethics law violations at the Ohio Police and Fire Pension Fund – more than $200,000 in meals, golf, entertainment and travel for board members and their families over the past five years, paid by vendors who had done $33 million in business with the fund. Ethic investigators uncovered possible felony and misdemeanor violations including bribery and improper gratuities, unlawful interest in a public contract, and theft in office (See Ohio Pension Officials Could Face Felony Charges ).
The five public pension systems cover Ohio’s teachers, school employees, police and firefighters, state troopers, and public employees. The plans manage about $120 billion for more than 1.5 million active and retired Ohio workers.