Pension Legislation Remains Stalled — There Is Still Time to Voice an Opinion

Prior to the December holidays, both the Ohio House and Senate passed separate pension reform legislation — Amended Substitute House Bill 227 and Amended Substitute Senate Bill 133 respectively. Since the bills vary significantly, a compromise is needed to get a bill to the governor.

STRS Ohio has gone on record as endorsing the components of these bills that strengthen the functioning and monitoring of all the public pension systems. However, STRS Ohio and the other Ohio public pension systems do oppose two provisions in Am. Sub. H.B. 227. The first requires that 70% of investment trades and 50% of externally managed assets go to managers with significant presence in Ohio. As currently written, we believe this is not a guideline, but a mandate that would restrict the retirement boards’ investment authority and could cost Ohio’s public pension systems millions per year in additional fees and reduced investment returns. Joining the Ohio systems in voicing objections to these mandates have been the National Association of State Retirement Administrators, the Council of Institutional Investors and the Association for Investment Management and Research.

The Ohio systems also opposed giving the state treasurer sole authority to hire and fire the systems' executive directors. This would disrupt the checks and balances that exist in the current board structure by concentrating too much power with one person — especially for the investment of retirement funds.

At the time, the Ohio House and Senate had not reached a compromise. STRS Ohio members are encouraged to continue to let their legislators know their positions on the key provisions of these bills. You can contact them by calling 1-800-282-0253 or by visiting the Ohio General Assembly Web site at www.legislature.state.oh.us.

Related Information
Pension Fund Board Chairs State Opposition to House Bill 227 

Pension Fund Executive Directors Voice Concern Over House Bill 227

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