Associated Press report on STRS lawsuit

Teachers pension fund to pay workers $1.75 million in bonuses

CARRIE SPENCER GHOSE
Associated Press

11/03/05

COLUMBUS, Ohio - The State Teachers Retirement System has agreed to pay at least $1.75 million to employees who sued last year when they were denied bonuses because they don't do investing work, according to court documents.

The pension fund's board approved the agreement by an 8-3 vote Wednesday.

The lawsuit still remains active on other complaints that could bring punitive damages and payment of the employees' attorney fees. Any discussions on the trial or a possible settlement are confidential until the court rules, said Kim Norris, spokeswoman for Attorney General Jim Petro, who represents state agencies in legal matters.

Michael R. Szolosi Sr., a Columbus attorney representing the employees, declined to comment on the details.

About 275 non-investment workers sued in May 2004, just over a week after the board voted 5-4 to deny them the bonuses while approving $2 million in bonuses for another 102 employees whose job involves investing money for the $54 billion retirement fund that serves 400,000 active and retired teachers.

The average bonus for investment employees was about $11,000. The bonuses ranged from $438 to $54,147. The board also voted to end the bonus program.

Franklin County Common Pleas Judge Guy Reece ruled Oct. 20 that the employees have already proved their breach of contract claim and are owed the $1.75 million.

Last week, the fund said in a court document it would not appeal the ruling and would make the payments, as a show of good faith backing its request for a two-month delay to the trial, scheduled to start Tuesday.

The payments would include interest and payments to the employees' pension fund based on the bonus amounts, the document said. A motion filed by Szolosi said interest should be $385,000, but the state wants to pay only $187,000, and that the pension payments would be about $150,000.