Thursday, July 10, 2003

Pension council pushes audit

By Jordan Gentile
Enquirer Columbus Bureau

COLUMBUS - The Ohio Retirement Study Council decided Wednesday it doesn't need the legislature's permission to audit the state's embattled teacher pension system.

Council members voted unanimously to inspect the State Teacher Retirement System's books as they questioned why $14 million in bonuses were given out to retirement system employees over the last three years while teachers were losing $12 billion in retirement investments.

"I come here with a heavy heart," said Debbie Scott, the teacher retirement board chairwoman, referring to the public bashing her organization has taken from teachers and lawmakers. The bonuses were given, she said, after hired consultants said her employees were not being paid the industry standard.

Scott also said her organization knew that the bonuses were higher than those handed out by the state's other Ohio pension funds. In fact, Public Employee Retirement System Director Laurie Hacking said all bonuses given out by her organization last year amounted to about $200,000, as opposed to the millions spent by Scott's board.

While Scott testified that all bonuses for 2003 were halted as a result of the public uproar, Damon Asbury, deputy board director, said after the meeting that bonus checks to investment managers were sent out just this spring.

"I thought there was some evasiveness in her answers," said State Rep. John Boccieri, D-New Middletown, a council member. He asked Scott repeatedly whether consultants the board hired had recommended that bonuses of almost $900,000 be paid to employees who didn't make investment decisions.

Council members were also upset to learn that teacher retirement system Director Herbert Dyer receives a percentage of all bonuses paid out by the system. Dyer was heavily criticized this month for saying pension money did not belong to the teachers, but to the board.

Council member and state Rep. Michelle Schneider, R-Madeira, asked whether it was "common industry practice" for an executive director to receive such a perk. Peter Gundy, a representative of the teacher retirement system's hired consulting firm, Buck Consulting, said he didn't know.

Some lawmakers questioned whether the retirement study council had the legal authority to audit the teacher pension fund. Schneider said Monday she planned to introduce a bill that could have expanded the council's authority.

But state Sen. Lynn Wachtmann, R-Napoleon, the council chairman, said he saw nothing in the law that prevented the panel from hiring an independent auditor. Scott said she wouldn't try to block the council's inspection.

Wachtmann said he hopes the review can be under way by early fall.

The retirement system "does good work," Wachtmann said. "But we have to get the public trust back."

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