Heat is on Ohio Teachers’ executive director

COLUMBUS, Ohio — Herb Dyer, executive director of the $42.4 billion State Teachers' Retirement System of Ohio, is facing mounting pressure from legislators and retirees to resign.

In an interview, Mr. Dyer, who has been executive director of the retirement system since 1993, said he is saddened and disappointed by the criticism but has no plans to step down and has done nothing for which he feels the need to apologize.

He said the system is well run. Its assets have grown by $18 billion in 10 years, and it saves STRS members money by managing 80% of the assets in-house.

Nevertheless, Ohio State Sen. J. Kirk Schuring, R-Canton, said a bipartisan group of 106 of the 132 members of the Ohio Legislature publicly called on Mr. Dyer to leave. Mr. Schuring is also a member of the Ohio Retirement Study Council, which reviews how Ohio's pension funds operate and submits reports to the Legislature and the governor.

The legislators are angry about what they call the pension fund's free-spending ways at a time its assets have declined 28% in three years, and retirees face higher contributions and health-care costs. The pension fund had $42.4 billion as of March 31, down from a high of $58.7 billion on Aug. 31, 2000.

The questionable spending includes:

-- $12.2 million in STRS employee bonuses, even as the fund lost $16.3 billion;

-- free child care for STRS employees;

-- $530,000 for board member travel to places like Hawaii and Alaska; and

-- nearly $900,000 for sculptures, artwork and polished stones for the retirement system's remodeled and expanded Columbus headquarters.

In addition, the fund's staff was expanded from 414 employees to 725 employees between 1996 and 2002, including 137 added in 2001.

Mr. Dyer unwittingly fueled the fire when a note he wrote in response to a retiree's letter outlining concerns about rising health-care premiums was made public. Jotted in red ink at the bottom of the retiree's letter, Mr. Dyer's note said it was the board's job to allocate resources to pay for insurance and that the money to do so belonged not to the retirees, but to the board "to distribute as they see fit."

"He (Mr. Dyer) has created a culture within the system that needs to be eradicated," Mr. Schuring said in an interview. "Given the fact that he is obviously of the belief that he can do whatever he wants because that money is the board's money, to me that's an incriminating statement, and he has never once retreated from it."

Mr. Schuring said he would continue to push for Mr. Dyer to resign or be fired, and plans a rally at the fund's Aug. 15 board meeting "if he's not gone by then."

State Rep. Michelle Schneider, R-Cincinnati, said Mr. Dyer should resign "immediately." Ms. Schneider, who is also vice chairwoman of the Ohio Retirement Study Council, said she was "appalled and outraged" by the arrogance Mr. Dyer displayed when faced with spending questions from legislators and retirees. She said she plans to work with Gov. Bob Taft to strengthen the oversight of the retirement study council.

In a June 17 letter to STRS board Chairwoman Deborah Scott, State Auditor and ex-officio board member Betty Montgomery said she felt Mr. Dyer had not honored the trust board members placed in him in awarding bonuses to STRS employees. Worse, she said, were Mr. Dyer's public comments, which she said ranged from "arrogant" to "erroneous" and reflected "a complete lack of professional demeanor."

But Aristotle L. Hutras, director of the Ohio Retirement Study Council, said there is no evidence Mr. Dyer did anything worse than exercise bad judgment and poor timing. "Has Mr. Dyer done anything controversial? Yes. But improper? No," Mr. Hutras said.