Controversial Consulting Firm Fails to Get Approval for Deal with Ohio Teachers’ Pension Fund

Source: https://www.wcpo.com/
The Ohio retired teachers’ pension fund board has opted not to proceed with the controversial consulting firm, The Hackett Group, following investigations. Instead, the State Teachers Retirement System (STRS) Governance Committee recommended Global Governance Advisors (GGA) for the governance advisory contract, and the full board unanimously approved this decision. GGA has a strong track record in governance consulting for pensions, having previously worked with organizations such as the Wyoming Retirement System and CalSTRS. Their base cost for services is $110,000 per year, with additional hourly fees for other work.
Global Governance Advisors (GGA) was chosen for governance consulting due to their strong references from various pension systems, including the Wyoming Retirement System and CalSTRS, with a base cost of $110,000 per year plus hourly fees for additional work. Concerns were raised by senior staff about The Hackett Group, citing their lack of relevant experience, absence of references, personal ties to the board chair, and significantly higher costs. Investigative reporting is credited as a key factor in the decision not to hire Hackett. Additionally, records revealed that Hackett had contacted a board member after the proposals were opened, which should have led to their disqualification under ethics policies.
The State Teachers Retirement System (STRS) is currently facing turmoil, marked by internal conflicts, two board resignations, and allegations of public corruption and fund mismanagement. Recent developments include a lawsuit by Attorney General Dave Yost aiming to remove two board members, Wade Steen and Chair Rudy Fichtenbaum, over claims of a contract steering scheme involving the investment firm QED, which lacks experience and proper registration.
The controversy began with debates over investment strategies—between actively managed funds and index funds—leading to a shift in board composition favoring “reformers” advocating for lower costs and reinstatement of cost-of-living adjustments (COLA) for retirees. Allegations have arisen regarding conflicts of interest and questionable decisions by the board, further complicating the situation.
Despite STRS’s assertion of performing better than other state pension systems, the ongoing investigations and leadership changes continue to generate significant concern and criticism from various stakeholders.
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