STRS Flashback - 6 Years Ago - Betty apologized, Jimmy felt a little bit of responsibility and Eugene dodged while....

From John Curry, October 5, 2009

....Dr. Leone admonished all for engaging in crazy spending practices.

October 9, 2003

Pension system failures debated

By PAUL E. KOSTYU
Copley Columbus Bureau chief

COLUMBUS — Two candidates for governor in 2006 disagreed Wednesday on how to improve oversight of the state’s five pension systems, but a critic of one of those funds blasted both for ignoring their responsibilities.

Though six witnesses testified that they supported Senate Bill 133, omnibus legislation intended to reform the operation of the pension systems, all of them also had trouble with it.

They appeared before the Senate Health, Human Services and Aging Committee, which has put the measure, sponsored by its chairman, Sen. Lynn R. Wachtmann, R-Napoleon, on a fast track.

The pension systems have come under increased scrutiny since June after media reports, many by Copley Ohio Newspapers, about excessive spending and policy lapses while investment portfolios fell and member health-care costs rose.

State Auditor Betty Montgomery apologized, saying that during her eight years as attorney general her representatives on the pension boards, particularly the State Teachers Retirement System, should have done a better job of monitoring their decisions.

But an apology had to be dragged out of Attorney General Jim Petro, the former state auditor.

He and Montgomery have announced they will run for governor in 2006.

Petro said he has been warning for 20 years that reform has been needed. He said a lack of confidence in the systems is not new.

“The lack of confidence has been there,” he said.

“Did your representative fail in his responsibilities,” said Sen. Robert Hagan, D-Youngstown, who earlier had put the same question to Montgomery.

“Absolutely not,” Petro said.

“Your predecessor accepted responsibility,” countered Sen. Dan Brady, D-Cleveland. “Couldn’t you accept responsibility?”

“That’s a fair point,” Petro said.

Petro admitted his representatives on the boards fought for changes during his first term as auditor, but they were less vocal in his second term.

“I feel a little bit of responsibility” for that, he said.

Montgomery told the committee she opposes SB 133’s provision to remove the attorney general from the pension boards, while Petro said it was a good idea. They agreed that the Office of Inspector General should not have expanded authority to investigate the pension systems.

Chillicothe Superintendent Dennis Leone, who many credit with initiating the investigation into STRS, said Montgomery and Petro should have been watching the systems closer and sooner. He also accused all nine members of the STRS board, including representatives of Petro and Montgomery, of violating state law for engaging in “crazy spending practices.”

He said SB 133 does not properly address inequities in the representation between active teachers and retired members.

Both Eugene Norris, chairman of the STRS board, and Laurie Hacking, executive director of the Public Employees Retirement System, promised their cooperation to work with the committee.

Norris dodged questions from Wachtmann about whether members of his board inquired about spending practices before they came to light in June.

Hacking said she opposed changing the membership of her board. Other provisions of the bill she described as “reasonable.”

Mary Beth Hunter of Alliance encouraged Wachtmann to allow plenty of time to hear from anyone willing to come to Columbus to testify about his bill.

“I don’t silence witnesses,” Wachtmann said. “Take all the time you need.”

With a smile, he added he didn’t mind shutting up fellow committee members when they launch into speeches.