Denied bonuses, employees sue state retirement system

The bonuses had been due in September 2003, an attorney said.
COLUMBUS (AP) -- Employees who were denied performance bonuses under a now-defunct incentive program sued the State Teachers Retirement System, saying the pension board acted arbitrarily and in bad faith.
The suit filed Friday in Franklin County Common Pleas Court seeks $1.8 million for 268 workers who weren't involved in investing money for the fund's thousands of retired Ohio educators.
The board voted 5-4 May 20 against paying the bonuses. At the same time, the board approved paying $2 million for 102 employees whose job involves investing money for the $54 billion retirement fund.
The board also voted in favor of eliminating bonuses for noninvestment employees in the future.
Michael Szolosi Sr., a Columbus attorney who filed the lawsuit, said the bonuses for clerks, accountants and other employees were due in September 2003.
The suit seeks temporary and permanent injunctions to prevent the retirement system from using the money set aside for the bonuses for other purposes.
The plaintiffs also want their bonuses plus an unspecified amount for interest, attorney fees and punitive damages, Szolosi said.
Affecting benefits
The suit said not getting the bonuses will affect employee retirement benefits, which are based on the average of the final three years of pay.
The suit also accuses the system and board of arbitrarily setting a lower figure for calculating how much the bonuses should be.
The incentive bonuses are from a program that was suspended in the aftermath of revelations about excessive spending last year.
The retirement system serves more than 410,000 active and retired educators.
Damon Asbury, executive director of the State Teachers Retirement System, said he knew some employees were talking about filing a lawsuit.
"This was not unexpected," he said. "We will turn it over to the attorney general to look at and advise us on our next step."
Kim Norris, a spokeswoman for Attorney General Jim Petro, said the case "is winnable because of the financial condition of the funds" at the time the bonus plan was in effect.
The bonuses were to be awarded to noninvestment employees for work done in the 2002-03 fiscal year.
The pension board rejected paying the bonuses despite a warning from assistant Attorney General John Patterson that it likely would be sued and would lose in court if the bonuses weren't paid.
"They openly speculated that they may not get sued," Szolosi said. "Well, they've been sued."