STRS employees sue over bonuses: Canton Repository

Teachers retirement system to pay $3M-plus to settle suit

BY PAUL E. KOSTYU
COPLEY COLUMBUS BUREAU CHIEF
11/03/05

COLUMBUS -- The State Teachers Retirement System has agreed to pay more than $3 million as part of a continuing lawsuit brought by noninvestment employees against the pension fund.

The price tag could go higher.

At a special meeting Wednesday, the pension board remained in a closed session for nearly three hours before voting 8-3 in public session to back a partial agreement. Board members, Executive Director Damon Asbury and in-house attorney Bill Neville refused to comment on the conditions of the agreement.

The board approved it without a settlement document, and based its decision on advice from special counsel, John Stock, a Columbus lawyer appointed by Attorney General Jim Petro.
Copley Ohio Newspapers has learned the agreement stands at $3,004,000.

Of that, $1.75 million will be used for bonuses Franklin County Judge Guy L. Reece II ordered the State Teachers Retirement System to pay last month. That means the board agreed not to appeal Reece’s decision. Another $625,000 will go toward paying the employees’ attorney fees. The rest of the money will go to the employees, according to several sources.

A 2003 investigation by Copley Ohio Newspapers found that bonuses were awarded for tasks, called “stretch goals,” that many considered part of employees’ regular jobs.

The retirement system board responded by suspending and then later abolishing the bonus program. It also voted not to award the bonuses to noninvestment staff, overriding decisions to do so by former Executive Director Herbert Dyer and Asbury, his successor. The board also ignored the advice of John E. Patterson, an assistant attorney general.

Dennis Leone and John Lazarus, who were elected to the board in part because they opposed the bonuses, voted against the agreement, but they repeatedly refused to comment about the details of it.

“I don’t know what to tell you,” Lazarus said. “I voted ‘No’ because I have been against the principle of giving bonuses to noninvestment staff from the beginning. Standing on principle might cost you sometime.”

Leone said he would comment only after a “lingering issue” separate from the agreement is dealt with in two or three weeks. He would not elaborate. He did say, however, he thought that a document spelling out what the board decided should have been made public.

Lazarus said the board needs to talk with a unified voice and that any comment should come from Neville, who refused to comment.

In the meantime, a Tuesday court hearing about attorney fees, punitive damages and other issues has been delayed, according to Michael R. Szolosi Sr., a Columbus attorney representing the employees.

Szolosi also refused to spell out the details of the agreement, calling it a “partial interim payment,” and saying that he was working on his version of it Wednesday night.

“The (employees) will be pleased and appreciative,” he said of the agreement. “It will help resolve some issues.”

But other issues remain, Szolosi said, emphasizing that the case has not been settled.

Reach Copley Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail:
paul.kostyu@cantonrep.com
http://www.cantonrep.com