COLUMBUS, Ohio — The acting executive director of the Ohio retired teachers' pension fund and their chief investment officer have resigned after months of controversy.
The day after an exclusive 45-minute interview with me, State Teachers Retirement System (STRS) Acting Executive Director Lynn Hoover has resigned effective Dec. 1. Chief Investment Officer Matt Worley has also resigned effective March 31.
Both letters to the STRS board came Wednesday evening. Despite requesting to hold off on sharing the information until Friday, the details were leaked to me Thursday morning.
I reached out to STRS, and their spokesperson confirmed the resignations. I am awaiting responses to my questions and records requests.
Hoover had been the head and chief financial officer since November 2023 after predecessor Bill Neville was put on paid leave while a law firm appointed by Attorney General Dave Yost investigated allegations of violent outbursts and sexually explicit language. Neville was just given $1.65 million to part ways with STRS.
Before that, Hoover spent 30 years with the system and was CFO before Neville's leave. Her contract was set to be up Dec. 31.
Worley, along with being CIO, has worked at STRS for 30 years.
By resigning when they each hit 31 years, they can collect pensions from the Ohio Public Employees Retirement System (OPERS).
One-on-one
"The first and foremost goal of us is a safe and secure pension for all," Hoover said in my one-on-one from Tuesday, the day before she resigned.
Her goal has faced some roadblocks over the past year due to fears of a corruption plot. The controversy inside the STRS has intensified under Hoover’s tenure.
These resignations come as STRS has been in endless chaos. In summary, there has been constant fighting, two board resignations and allegations of both a public corruption scheme and mishandling of funds. As of this week, there has been a dismissal and two senior staff resignations.
In my interview with Hoover, we talked about the state of the fund, investment growth and the ongoing controversy — but what she didn't tell me is that she would be resigning the day after our interview.
Both senior and junior staff members immediately reached out to me after this story was published Thursday morning, saying it was a surprise for them, too.
So what happened? Well, on Tuesday, she told me that last Friday hit her hard.
A board member proposed a vote of no confidence for the "direction" that the STRS staff members were going, arguing that they lied to try to get Steen in trouble because they were corrupt.
"It feels like a slap in the face," Hoover told me.
The proposal ended up failing since it had only five votes for it when it needed a supermajority.
Attorney General Dave Yost filed a lawsuit against board leader Rudy Fichtenbaum and former board member Wade Steen for alleged contract steering. While this investigation is ongoing, the two men and their allies have been trying to push Hoover out for nearly a year, accusing her of leading the charge to oust the board members.
We have been covering this controversy from the beginning, including more than a dozen recent stories dealing with the latest problems around the alleged corruption plot. Watch and read this story for a more in-depth recap.
RELATED: Chaos-filled day at Ohio teachers’ pension board leading to even more ethical concerns
"If your board doesn't vote overwhelmingly that they have confidence in you, you can take a big lesson from that," retired educator Robin Rayfield told me.
But we did talk about how Hoover's contract was expiring. With knowing the board may go a different direction in 2025, she explained how important the director's job is.
"You're not only responsible for the board member engagement and relationship primarily," she said, adding in that you need to be good with people and have strong interpersonal skills. "We're responsible for the membership, you're responsible for managing and overseeing all of the areas of the organization."
"Would you not want it?" I asked her.
"I'm at the more tail end of my career," Hoover responded. "I never thought I was gonna be here this many years later — but here we are."
Context
The controversy began from a debate on how STRS should invest money — through the current system of actively managed funds versus an index fund. Active funds try to outperform the stock market, have more advisors and typically cost more. Index funds perform with the stock market, are seen as more passive, and typically cost less.
In short, "reformers" want to switch to index funding, while "status quo" individuals want to keep actively managing the funds. Recent elections have allowed the "reform-minded" members to have a majority of the board.
Reformers want a cost-of-living adjustment, or COLA. The COLAs were suspended for more than 150,000 retired Ohio teachers for five years starting in 2017. They were reinstated, but there has been a suspension of increases, significant for retirees who need this money and are dealing with inflation.
STRS staff have explained that they know the COLA is essential and are working to get it back. They added that the system is functioning well — better than any of the other pension systems in the state. A report done by the Ohio Retirement Study Council found that STRS has a higher return than any of the four other state pension systems.
However, STRS has $20 billion in unfunded liabilities. There are additional risks related to negative cash flow, investment returns and the ratio of actives to retirees that are exacerbated by the size of this unfunded liability, according to the ORSC.
Because of this, the COLA can't be fully restored at the current time but is on track to be restored in the next decade.
Due to the lack of a full COLA, and other concerns from reformers, the faction of pensioners have been demanding Hoover and Worley resign for months now.
To ask questions or provide comments about STRS, please email Morgan.Trau@wews.com with the subject line "STRS COMMENT." Or, fill out the form below.
Sources are welcome and encouraged.
Follow WEWS statehouse reporter Morgan Trau on Twitter and Facebook.
