COLUMBUS Senate to weigh pension reform

By JEFF ORTEGA
VINDICATOR CORRESPONDENT
COLUMBUS -- Members of public retirement boards convicted of certain criminal offenses would be automatically removed and retirement system investment officers would be licensed under a pension-fund reform proposal unveiled Wednesday.
The proposed bill, to be introduced this week by state Sen. Lynn R. Wachtmann, R-Napoleon, would also remove the state attorney general's office from most of the public pension boards and would set up procedures to allow that office to investigate potential breaches of duty by board members.
The attorney general's office would be replaced on the boards by the Governor's Office of Budget and Management.
The reform measure comes in the wake of highly publicized problems at two of the state's public retirement systems.
Earlier this year, Herb Dyer, executive director of the State Teachers Retirement System, resigned after criticism was leveled at him and the STRS board regarding reports of large bonuses and what some have called lavish spending at the pension system, which has more than 400,000 active and retired members.
At the same time, STRS investments lost at least $12 billion in value, and health benefits for retirees were cut.
The Ohio Police and Fire Pension Fund has come under fire after recent published reports revealed that it spent more than $612,000 since 1998 on board travel expenses.
Under Wachtmann's proposal, members of the both those boards, the Highway Patrol Retirement System, the School Employees Retirement System and the Public Employees Retirement System would automatically be removed from office if they're convicted of offenses including theft, dereliction of duty, bribery, obstruction of justice and perjury.
Wachtmann's proposal also would remove the Ohio Attorney General's Office from four of the five pension fund boards it serves on now. The bill would allow the attorney general's office to probe and bring a civil action against board members.
Licensing
Under the bill, those making investment decisions would be licensed by the Ohio Division of Securities. Right now, those making investment decisions are exempt from licensing.
Wachtmann, who is also chairman of the Ohio Retirement Study Council, which oversees public retirement systems, promised committee hearings and consideration by the full, GOP-led Senate by year's end.
State Sen. Robert F. Hagan, a Youngtown Democrat and a member of the Senate Health Committee, said minority Democrats will be watching closely.
"There has been some terrible abuse," Hagan said.
The GOP-led House is also working on a pension-reform bill, and Gov. Bob Taft is pushing for reforms.
"We're going to work through the details with the Senate and Senate leadership to reach consensus on a bill that the governor can sign as soon as possible," Taft spokesman Orest Holubec said.
"It's far-reaching," said Bill Estabrook, executive director of the Police and Fire Pension Fund, which represents about 22,000 retirees and about 24,000 active members.
Wachtmann's proposal would also require the pension fund boards to adopt new ethics and travel policies, and would specify that the retirement study council has the power to contract for performance audits of the retirement systems every five years.
The legislation would also specify that board members must file financial disclosure statements with the Ohio Ethics Commission and would require senior staff members and others with policy-making authority to file the disclosures with the ethics commission.