Statehouse News Bureau

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Auditor forecasts "concerns" about findings in special audit of Ohio teachers' pension fund

By Karen Kasler

Published September 17, 2022 at 4:18 AM EDT

Retired Ohio teachers put up a banner during a break in a meeting of the State Teachers Retirement System board meeting in September 2022. Some of the teachers had been coming to board meetings for months to protest the suspension of the COLA in 2017. [Karen Kasler / Statehouse News Bureau] — Retired Ohio teachers put up a banner during a break in a meeting of the State Teachers Retirement System board meeting in September 2022. Some of the teachers had been coming to board meetings for months to protest the suspension of the COLA in 2017.

It was almost a year ago when Republican state auditor Keith Faber announced there would be a special audit of the pension fund supporting 157,000 retired Ohio teachers and their survivors.

Nearly a year later, the auditor said the review of the books of the State Teachers Retirement System is still underway, but it could be coming to an end.

Faber said his office had to hire some outside help.

"What we did is go out and hire an independent actuarial consultant, but we had to find somebody who didn't do work for the plans. That took us a little longer than we anticipated," Faber said in an interview for "The State of Ohio". "But they are in it. We actually just last week got some more information from other people who are giving us information, additional things to look at."

And he said so far they’re discovering some worrisome things.

“We've got some concerns. I will just tell you that audit's going to have some concerns," Faber said. "We don't talk about audits while they're pending, but we have some concerns and things that we're identifying. But we are on it. We are working aggressively.”

Faber said the special audit should be done by the end of the year.

But he also suggested other agencies should be doing some reviews too.

"Don't forget, there are other individuals and entities who do oversight on the state pension plans," Faber said. "The Retirement Study Council is the big one. They're the ones that are supposed to be looking at the investment and that history. We look generally at the numbers and whether the information that they're sharing is accurate."

Last year, retired teachers hired Ted Siedle, an outside expert in pensions, to look into STRS after they hadn't gotten cost of living adjustments since 2017, when other pension funds were able to maintain their COLAs. The STRS board voted for a one-time 3% increase this year.

Five months later, the board awarded $10 million in what it called "performance incentives" to investment managers. The fund lost $3 billion last year, though that’s only about 3% of its overall value.