COLUMBUS, Ohio (AP) — Despite the chaos at the top that her successor will inherit, the departing director of Ohio’s troubled teachers retirement systems stated that she is leaving the fund in good financial condition.
Acting Executive Director and CFO Lynn Hoover recently told The Associated Press that the $94 billion State Teachers Retirement System of Ohio’s short-, middle-, and long-term returns are still within the top 10% of peer funds nationwide.
Hoover, who has witnessed her investment crew denied performance bonuses due to recent tensions, stated, “We have delivered.” After 31 years at STRS, one of the biggest and oldest public pension systems in the country, she will retire on Sunday. Active and retired public school teachers make up its membership of about 500,000.
She added that Aaron Hood, the next interim director, still has a significant task ahead of him.
The seasoned asset management expert and U.S. Army veteran joined the team this month and will assist in spearheading a national search for a new permanent director to succeed Bill Neville, who was fired in September after being placed on leave due to misbehavior charges. Hood also has to select a new head of internal audit, fill Hoover’s position as chief financial officer, and fill a chief investment officer position that will open up in March.
According to Hoover, the main goal is to fill those positions and bring in highly qualified individuals who can carry on this outstanding tradition.
Years of friction culminated in this spring’s staff departures. After retirees were incensed when the previous board reduced their cost-of-living adjustment and subsequently removed it for five years to assist maintain the fund, would-be reformers on the STRS board attacked the fund’s internal processes and investment choices. The 1% adjustment they received in 2024 and the 3% adjustment they received in 2023 have left many unhappy.
Republican Ohio Governor Mike DeWine declared in May that he was turning over a 14-page anonymous memo and other papers that included unsettling claims regarding the STRS board to the appropriate authorities. The following day, Republican Attorney General Dave Yost of Ohio opened an investigation into what he described as the fund’s vulnerability to a hostile takeover by private interests. Since then, lawmakers have started to contemplate removing elected members from the board as part of the continuing investigation.
Following the start of his inquiry, Yost filed a lawsuit in an attempt to remove two of the board members who were committed to reform. Rudy Fichtenbaum, one of those members, rose to the position of board chair. Wade Steen, the other, is no longer on the board. In October, he also sued two other former board members, claiming they were involved in a civil conspiracy that kept him from exposing the fund’s flaws.
According to The Blade of Toledo, documents in Minnesota revealed that Hoover and others spoke with their counterparts to lessen the impact of the inquiry when the same whistleblower lawyer who looked at STRS performance measures appeared there to carry out a similar task.
According to Hoover, the communications followed standard procedure and were in line with the course.
They just said, “Would you be able to get on the phone call with us?” She described this as being rather common for peer firms to share information on best practices and how they’ve addressed related problems.
Despite all of the recent controversies, Hoover expressed her pride in the professionalism of the crew.
According to her, the employees have remained steadfastly committed to the mission and member security.
She added that over the last three and a half years, STRS has paid out more than $4 billion in positive benefit changes to active teachers and retirees, which she ascribed to robust markets and wise investment practices.
Long-term investment returns are crucial because our fund is in a position where we give out more benefits than we get in contributions, she said.
She also admitted that it has been difficult for members to deal with the effects of rising inflation and changes to pension reform.
Members should be pleased that the fund is now evaluating cost-of-living adjustments on an annual basis, according to Hoover. “STRS is fighting to increase employers’ contributions into the fund,” she noted. According to her, the percentage they pay in Ohio hasn’t changed in forty years.
She added that STRS is still advocating for equitable school funding and has engaged the international commercial real estate firm CBRE to study future usage requirements for its buildings, which are capital rather than investment assets.
Additionally, the retirement system is closely monitoring the implementation of Ohio’s new universal voucher program, which is available to students attending both public and private schools.
According to her, our system is impacted to the degree that it begins to remove students from public school, which lowers the number of teachers and, consequently, their compensation. We want to support public education, and teachers greatly benefit from the public pension scheme. They should enjoy a stable, secure monthly pension till they pass away because they have served, worked, and educated our children.
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