Skip to main content
MENU
Subscribe
  • Subscribe
  • Account
  • LOGIN
  • Topics
    • Alternatives
    • Consultants
    • Coronavirus
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Opinion
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Russia-Ukraine War
    • SECURE Act 2.0
    • Special Reports
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • Climate Change: The Inescapable Opportunity
    • Impact Investing
    • 2022 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2022 Defined Contribution East Conference
    • 2022 DC Investment Lineup Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Performance Data
    • P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
    • Future of Investments Research Series
    • Charts & Infographics
    • Polls
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2022 Innovation Investing Conference
    • 2022 Defined Contribution East Conference
    • 2022 ESG Investing Conference
    • 2022 DC Investment Lineup Conference
    • 2022 Alternatives Investing Conference
Breadcrumb
  1. Home
  2. Print
November 24, 2003 12:00 AM

Ohio public plan directors taking aim at legislation

Bill would impose investment and trading limits, also expand state treasurer powers

Barry B. Burr
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    COLUMBUS, Ohio — The executive directors of the five Ohio state retirement systems, whose combined assets total $115 billion, sent joint letters Nov. 20 to Gov. Bob Taft and legislative leaders opposing parts of a bill approved by the state House.

    Specifically, the executive directors of the Ohio Public Employees Retirement System, Highway Patrol Retirement System, Police and Fire Pension Fund, State Teachers Retirement System and School Employees Retirement System opposed sections of HB 227 that would impose investment and trading mandates on the funds; appoint the state treasurer to the boards of all five systems; and give the treasurer the power to hire and fire the executive directors of all five state retirement systems, with consent of the respective boards.

    In their letters, the five retirement officials wrote that restricting investment authority to in-state firms could cost the systems an estimated $180 million.

    They also said giving the treasurer the power to hire and fire executive directors "would disrupt the checks and balances that exist in the current board structure by concentrating too much power with one person, especially for the investment of retirement funds. Furthermore, empowering the state's treasurer with these appointment responsibilities impedes board members' fiduciary duty."

    The treasurer, who doesn't sit on the boards now, would replace the attorney general.

    Earliest consideration

    The earliest HB 227, which passed the Ohio House of Representatives by an 80-13 vote on Nov. 13, can be considered for a committee assignment by the state Senate is in December, said Maggie Mitchell, spokeswoman for the Senate Republican Caucus. The General Assembly session ends year-end 2004.

    A pension reform bill also passed the Senate the same day. SB 133, approved 27-6, would restructure oversight and ethical standards of the state retirement systems, similar to the House bill. But the Senate bill does not contain any investment or brokerage mandate, nor does it give appointment powers to the state treasurer.

    Senate President Doug White and House Speaker Larry Householder "haven't discussed how the bills would be reconciled," Ms. Mitchell said.

    HB 227 would require at least 50% of externally managed investments and 70% of equity and fixed-income trading to be handled by in-state firms. It would also require the systems to use in-state minority managers for an additional 10% of the externally managed assets and 10% of trading.

    Officials at Banc One Investment Advisors Corp., Columbus — the largest money manager based in Ohio with assets under management of $142 billion — declined to comment, said Julie Crothers, director of public relations for asset management.

    At Victory Capital Management Inc., Cleveland, which has $72 billion in assets under management, Ron Petrie, vice president-public affairs, said its officials have no comment, adding, "We're going to stay out of a political issue." Officials at Fifth Third Bancorp, Cincinnati, which has $13 billion in assets under management, didn't get back with comment.

    Separating mandates

    Ms. Mitchell said Mr. White favors separating the investment and brokerage mandates into a separate bill from the oversight and ethical issues; she isn't sure whether he would favor such mandates.

    State Sen. Lynn R. Wachtmann, sponsor of SB 133, also favors breaking out the investment and brokerage mandates into a separate bill, said Bethany Rhodes, an aide to the senator. She added Ms. Wachtmann isn't sure if he would support the House bill's investment restrictions.

    "The governor believes that qualified potential Ohio managers should have the opportunity to compete for business," said Orest Holubec, press secretary for Mr. Taft. "But whether it should be mandated is something he is still considering."

    State Treasurer Joseph T. Deters isn't in favor of the mandates, said Lisa Peterson, an aide.

    Both the Senate and the House bills name the state treasurer to the boards of the state retirement systems; only the House bill gives him the authority to hire and fire executive directors of all five systems with consent of the boards, a power he demanded in testimony before a House committee hearing and in a letter to Rep. Michelle G. Schneider, sponsor of HB 227.

    Mr. Deters, in testimony to a House committee, said giving him extra powers as a board member would aid accountability.

    "Under the current construction, the power of the board is diffused to as many as nine separate members," Mr. Deters testified. "The level of accountability is minimal at best."

    The "statewide elected treasurer would be ultimately accountable to the people of the state for the behavior of these critical organizations," he testified.

    Neil Toth is director-investments for the Ohio Public Employees Retirement System, Columbus, which has $55 billion in assets, including $22 billion managed externally. In testimony before the House committee about the bill, he said the investment management restrictions would cost OPERS $40 million to $100 million annually. The cost of complying with the trading provisions would cost OPERS $20 million to $40 million a year.

    Recommended for You
    Read the print edition of P&I
    Read the print edition of P&I
    How low is low? Projections say it's not low enough
    How low is low? Projections say it's not low enough
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    Alternatives: Investing Across the Spectrum
    Sponsored Content: Alternatives: Investing Across the Spectrum

    Reader Poll

    May 9, 2022
    SEE MORE POLLS >
    Sponsored
    White Papers
    Are Factors a Thing of the Past?
    Q2 2022 Credit Outlook: Carry On
    Leverage does not equal risk
    Is there a mid-cap gap in your DC plan?
    Out of the Shadows: The Revolution in Shadow Accounting
    The pivotal role of fixed income markets in the ESG revolution
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    May 9, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Content Solutions
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2022. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Coronavirus
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Opinion
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Russia-Ukraine War
      • SECURE Act 2.0
      • Special Reports
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • Climate Change: The Inescapable Opportunity
      • Impact Investing
      • 2022 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2022 Defined Contribution East Conference
      • 2022 DC Investment Lineup Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Performance Data
      • P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
      • Future of Investments Research Series
      • Charts & Infographics
      • Polls
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2022 Innovation Investing Conference
      • 2022 Defined Contribution East Conference
      • 2022 ESG Investing Conference
      • 2022 DC Investment Lineup Conference
      • 2022 Alternatives Investing Conference