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Ohio AG sues and demands removal of two Teachers Retirement System board members

May 16 – Ohio Attorney General Dave Jost has filed a lawsuit to fire two members of the State Teachers Retirement System of Ohio (STRS) board, including a former professor at Wright State University, according to documents filed Wednesday in Franklin County Common Pleas Court.

The lawsuit asks that Wade Steen and Rudy Fichtenbaum, a former WSU economics professor, be removed from the board or barred from serving on the STRS investment committee. It accuses them of breaching their fiduciary duties.

“The Attorney General is filing this lawsuit, as he must, to protect teachers from private interests seeking to hijack their retirement accounts,” the lawsuit said.

Fichtenbaum said he did nothing wrong and that he plans to continue fighting for the interests of pension system participants.

“Since I was elected to the board, I have fulfilled my duty as a fiduciary, acting with integrity and in a professional manner. I have done nothing other than represent the interests of the members, both active and retired,” said he in a written statement. released on Tuesday. “When I was elected, I committed to a platform to restore COLA for all members, reduce administrative costs and ensure pension solvency.”

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Fichtenbaum called the allegations “gross” and said his goal was to improve STRS investment practices, increase transparency and prevent member benefits from being cut.

Steen could not be reached for comment, and STRS communications chief Dan Minnich said the system “cannot comment on pending litigation.”

Yost’s office did not respond to a request for comment.

Last week, Yost announced that he had opened an investigation into concerns about the pension system’s “susceptibility to a hostile takeover by private interests.” Yost cited an anonymous letter that his office and Ohio Governor Mike DeWine’s office had recently received requests from some members of the STRS board to change investment practices.

“Pension administrators are required by law to act in the best interests of the teachers whose money they invest,” Yost said in a May 9 news release. “I will take whatever action is necessary to protect teachers from private interests trying to hijack their retirement accounts.”

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Robin Rayfield, executive director of the Ohio Retired Teachers Association, disputed the allegations.

“Reformers have won the battle of ideas in the past six elections through a fair democratic process,” Rayfield said in a response to this newspaper earlier this month. “Teachers voted for reforms because reforms are desperately needed. Our actions in support of reform have been legal, ethical and necessary. This anonymous letter is nothing more than sour grapes from those who lost.”

Melissa Cropper, president of the Ohio Federation of Teachers, said the group is concerned about reports of STRS, according to a May 11 news release.

“But we warn OFT members – and all STRS members – not to respond to politically motivated rumors and innuendo,” Cropper said. “If board members have acted inappropriately, we expect that these actions will be addressed by official investigation by the Ohio Ethics Commission, the Attorney General and/or the State Auditor.”

She said the group’s focus remains on “supporting pension advocates for the STRS board, who are focused on making concrete changes that improve transparency and accountability at STRS and restore member benefits in a fiscally responsible manner .”

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STRS Ohio oversees approximately $90 billion in pension funds for approximately 530,000 retired school employees.

Staff writer Eileen McClory contributed to this report.

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