Wednesday, Oct 26, 2016
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Another pension scandal

Excessive spending on travel by trustees of the Ohio Police & Fire Pension Fund gives the General Assembly yet another urgent reason to demand reforms at the state's five public retirement systems.

News that police and fire trustees have spent lavishly on travel over the past five years, including $522-a-night sojourns at a ritzy Palm Beach, Fla., hotel, follows revelations of an administrative scandal at the State Teachers Retirement System.

The sooner the legislature gets a handle on these problems the sooner retired state employees will stop paying the penalty through higher health-care costs and reduced pensions.

To his credit, David Harker, the chairman of the $7.4 billion police and fire fund, which handles pensions for nearly 52,000 active and retired law enforcement officers and firefighters, has resigned under pressure. But where was the administrative oversight in the first place?

An examination of records by the Dayton Daily News zeroed in on Mr. Harker and another of the fund's 16 trustees, who together accounted for $218,000 of the $612,000 in travel expenses since 1998. Their travel, ostensibly for seminars to learn about such things as disability and deferred retirement programs, included 170 out-of-state trips, some for events that lasted only a half-day.

Astoundingly, Mr. Harker, a Dayton firefighter, billed the fund for 696 days of travel - just a shade under two years on the road out of the past five. How could he possibly have been doing his job at the same time?

Such outrageous spending might have been overlooked if the pension fund were flush and serving its members well, but it lost $1.67 billion between 2000 and 2001 in declining investments and recently was forced to boost health-insurance premiums dramatically for retirees.

Similarly, excessive travel has been a problem at STRS, along with huge bonuses paid to staff members, while that fund's assets declined by than 20 percent.

STRS's chief scandal, though, was a $550,000 severance package paid to the fund's executive director, Herbert Dyer, to step down.

In the case of both pension funds, trustees appear not to have been minding the store, but state law provides no easy way to oust those who fail to do their job, short of resignation.

Fortunately, state Sen. J. Kirk Schuring, Republican of Canton, pledges to push legislation to provide additional oversight and allow trustees to be recalled for just cause. Governor Taft and other state officials also have joined in the call for reform.

If trustees aren't carrying out their fiduciary responsibility to safeguard the state pension funds, it's time to provide replacements who will.

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