NewsmakersJune 16, 2023

Former Ohio Teachers Board Member Sues Pension, Governor

Wade Steen claims he was illegally removed from the board of Ohio’s State Teachers Retirement System.

Reported by Michael Katz

A former member of the State Teachers Retirement System of Ohio’s board of trustees is suing the board and the state’s governor, claiming he was illegally removed after calling for changes at the pension fund.

According to the complaint, Wade Steen, a certified public account, was first appointed to the Ohio STRS board in 2016 by then-Governor Jim Kasich as an investment expert and was reappointed in 2020 by current Governor Mike DeWine. Steen’s term was set to expire in September 2024. However, last month DeWine announced the removal of Steen from the board, replacing him with G. Brent Bishop, a managing partner at Scioto Capital Partners. The governor appoints one of the 11 members of the board.

DeWine said one of the reasons he replaced Steen was sparse attendance, stating that Steen missed three meetings and only partially attended three others since September 2022.

“You cannot be a voice for retired teachers if you are not in the meetings to be that voice,” he said, adding that he was also concerned Steen “was viewed as acting as an advocate for a specific investment firm at the expense of a thorough, competitive, and public process.”

Steen’s lawsuit, however, argues that DeWine does not have the authority to replace Steen mid-term and disputes the allegations that he was an absentee board member.

“Gov. DeWine claims without foundation that Mr. Steen serves at the pleasure of the governor and that he has the unbridled power to remove Mr. Steen as and when he determines,” the complaint states. “These are false claims, contrary to the Ohio Constitution, Ohio statutes and court interpretations of those statues.”

The complaint claims Steen’s attendance at board meetings was in compliance with his duties as a board member and that he did not do anything that would allow for his removal. Steen also defended having investigated the financial management and use of Ohio STRS funds, saying he was in compliance with his duties as the governor’s appointed investment expert. Steen was considered part of a faction of board members interested in reforming Ohio STRS’ process.

When asked to comment on the lawsuit, a representative for DeWine referred to the governor’s May statement explaining Steen’s replacement. At the time, DeWine denied the move was related to questions posed by Steen to the board about transparency, investment strategies and bonus payments. DeWine said he agreed with retired teachers who have expressed anger over certain investment and benefits decisions made by STRS.

“I am in favor of retired teachers getting a cost-of-living adjustment from STRS,” DeWine said in May. “I’ve questioned how staff have received raises and bonuses when the retirees they serve got nothing. I believe STRS should consider investment strategies to increase returns. And I believe that changes to investment vendors should be made through a competitive and transparent public process.”

In 2021, the Ohio Retired Teachers Association sued Ohio STRS seeking documents as part of an audit over a slew of allegations, including a lack of transparency and that Ohio STRS failed to make its mandated cost-of-living adjustment increases. However, a follow-up report by the state’s auditor found no evidence of fraud or illegal acts.

Steen’s lawsuit charges each of the Ohio STRS board members, as well as DeWine, with one count of usurpation of office. A representative for Ohio STRS said the pension fund was unable to comment on pending litigation.