Flashback -- 3 years ago: Public retirement system painting an 'ugly picture'
That wasn’t good enough for Rep. Michelle G. Schneider, R-Cincinnati, Sen. Kirk Schuring, R-Jackson Township, and Rep. John Boccieri, D-New Middletown, who are members of the Ohio Retirement Study Council.
Using investment returns on bonuses, artwork, subsidized child care, travel to Hawaii and Alaska, among other places, and other expenses of the retirement system board, Schneider said, was “wrong. It’s shocking. It’s a distorted perspective on whose money this really is.”
The system gave out nearly $1 million last year to 65 employees not associated with managing its financial portfolio. Thirteen got bonuses of more than $20,000, seven more than $30,000 and one topped $50,000. The investment staff received more than $13 million in bonuses even as the system’s portfolio lost $12.3 billion during the past three years.
Dyer told council members that upcoming changes to health-care benefits will cost retirees and their families more so that part of the system remains solvent.
Dyer would not apologize, however, for the spending spree, saying the staff deserved the raises. He said its effort was “superior if it was better work than average.”
He said the investment managers deserved bonuses because they kept the portfolio from losing more than it did.
“We didn’t lose the money by misplacing it,” Dyer said.
“I am most disturbed by the increases to employees,” said Schneider, who also questioned spending $869,000 on artwork.
“I collect artwork,” she said, “but I don’t do it with other people’s money.”
“Good artwork is expensive,” Dyer responded. “It’s what artists expect for their work. It was designed specifically to complement the decor (of the system’s building).”
At one point, Boccieri said to Dyer, “The more I listen to your testimony, the more agitated I get.”
Schuring, who was not present for Dyer’s testimony because he was attending another meeting, said later that he is convinced there has to be more oversight of the state’s retirement systems. He said the council is ill-prepared to provide oversight because overseeing spending is not part of its responsibility.
“How are we going to stop these things from happening again?” he said. “It might take legislative action. They have to be fiscally prudent and fiscally conservative. Bonuses and increases in staff are not needed.”
Council members also listened to Dennis Leone, the superintendent of Chillicothe City Schools, whose investigation of the retirement system led to the disclosures about spending. While teachers are being affected by the retirement system board’s decisions, he said, so are Ohio’s taxpayers. He noted that matching contributions to the retirement system come from school boards that use taxpayers’ dollars.
“That’s 944 employers who contributed $1.2 billion,” he said. “That’s taxpayer’s dollars.”
Leone said he closed three schools and laid off 45 employees “and I don’t get a bonus.”
Since 1998, the retirement system increased the number of its employees by 42 percent to 707.
He said the retirement system board “just doesn’t get it. They just don’t understand how it looks. They just don’t understand how wrong it is.”
Dyer insisted that the money to employees, which included a $41,000 bonus for himself, was needed “for getting (and keeping) a good staff.” He said it was necessary for board members to travel to meet “face to face” with fellow board members from other state systems to learn how to run the retirement system effectively and efficiently.
Leone said after the meeting that Dyer “danced all around” council members’ questions. He said the system’s spending “is completely foreign to me.”
You can reach Copley Columbus Bureau Chief Paul E. Kostyu at (614) 222-8901 or e-mail:
A Sampling of STRS Bonuses
The State Teachers Retirement System gave out nearly $1 million in bonuses last year to 65 employees ranging from the executive director to the director of the employee day-care center. The bonuses do not include more than $13 million in bonuses given to the managers of the system’s investment portfolio.
Thirteen noninvestment employees got bonuses of more than $20,000, seven more than $30,000 and one topped $50,000.
Here are the positions that topped $30,000:
Job Title - Annual pay - 2002 bonus - Percent
Deputy executive $150,000 $52,500 35%
Deputy executive $150,000 $49,875 33%
director, member benefits
Deputy executive $148,000 $49,728 34%
Executive director $266,810 $41,052 15%
Info. technology director $140,000 $33,368 24%
Government relations $108,675 $32,603 30%
General counsel $125,235 $31,309 25%
Here’s a sampling of salaries and bonuses for some other positions:
Communications director $95,800 $15,328 16%
Building services director $75,800 $14,402 19%
Child care director $61,400 $8,639 14%
Creative services manager $63,400 $5,706 9%
Food services supervisor $39,300 $1,965 5%
Total $5,615,065 $888,595 16%
Source: State Teachers Retirement System