Toledo Blade Editorial: Audit Ohio pensions

https://www.toledoblade.com/opinion/editorials/2023/02/28/editorial-audit-ohio-pensions/stories/20230228025

Editorial: Audit Ohio pensions

Toledo Blade

February 2, /2023
THE BLADE EDITORIAL BOARD

The news on Ohio’s five public pension funds is even worse than headlines detailing multibillion dollar losses indicate.

A report Thursday to the Ohio Retirement Study Council, the legislative body created to oversee the pension’s details deep losses. The Columbus Dispatch headlines the losses at $32 billion.

As we have pointed out in this space before, the actual losses are unknowable because much of the portfolio is valued by fund managers and is not audited.

The Ohio pensions don’t even know what they own in these funds.

The ORSC annual investment performance review is normally done in October, covering results through the fiscal year ending June 30th.

Had that been done last year voters would have been able to question candidates about the brewing pension crisis, which was ignored in the statewide election.

The terrible 2022 Ohio pension investment results would have been significantly worse if not for incredible performance claimed in the alternative investment portfolio.

The Blade Editorial Board does not believe these reported results because as we explained (“Ohio pension results hinge on private equity,” Aug. 21) in August, the market valuations of publicly traded private equity fund managers does not reflect this claimed success.

In the last legislative session, both the Ohio Police and Fire Pension Fund and the State Teachers Retirement Fund sought a law increasing the taxpayer contribution to the funds. Lawmakers took no action as local governments and schools opposed the added expense.

But the problem has gotten much worse so the pensions will be back again this session.

Before Ohio taxpayers send even a penny more to the state pensions, there must be a full accounting for the billions of dollars invested blindly and valued on faith.

Wall Street fund managers and state pension staff have reaped millions in bonuses on these investments. It’s long past time for the state auditor to validate they’ve been earned.

No Ohio Auditor of State has ever used their legal authority to require full transparency of the alternative investments and validated the claimed values.

Unless Keith Faber performs this duty, lawmakers must protect Ohio taxpayers from pension bailouts that reward Wall Street and require no reform in Columbus.

A state government that blithely accepts unbelievable investment results without investigation is 100 percent responsible for the political and financial crisis that results when money counted on doesn’t actually exist.