Ohio Educators Union Sues State Over Pension Fund Changes

COLOMBUS, Ohio — The largest educators’ union in Ohio is taking legal action against the state regarding recent modifications to the pension fund for retired teachers.

On Tuesday, a lawsuit was filed by the Ohio Education Association (OEA), the Ohio State Federation of Teachers (OFT), and the Ohio State University Association of Professors (OC AAUP). They argue that the alterations to the Teacher Resignation System (STRS) board are “unconstitutional and discriminatory.”

“This policy is just the latest in a series of attacks on educators in Ohio,” remarked Grenetta Klaus from Cincinnati Public Schools in a press release. “State politicians have consistently underestimated our public schools. They’ve rolled back our collective bargaining rights, abolished the elected state school board, and dictated what we can teach. And now, they’re stripping away our representation on our own retirement committee.”

The state budget’s last-minute provisions have modified the board setup from seven elected teachers—five from contributions and two retirees—to just two active educators and one retired educator.

The new law, enacted by Governor Mike DeWine, stipulates that the four removed educator seats will be filled by newly appointed members. The governor is set to appoint one investment expert, while legislative leaders will appoint additional experts. The treasurer will also choose one appointee, along with a director from the Ministry of Education and Labor Power.

In total, the treasurer will have two appointees, while legislative leaders will collectively appoint two, and the Prime Minister of the Ministry of Higher Education and the Governor will each appoint one. This shift has raised concerns among educators.

The lawsuit emphasizes that this change violates educators’ equal protection rights, as only the STRS has been altered while the other four Ohio civil servant pension funds remain unchanged. There are also challenges regarding the procedures through which these changes were made, particularly their incorporation into larger, multi-issue laws without the mandated three-day consideration period. This budget document touched on diverse topics from tax policy to LGBTQ+ rights.

Some lawmakers suggest these decisions stem from controversies that have emerged over the past year.

“We’re accepting the laws that have been enacted and are looking forward to what will be upheld in court,” stated Rep. Adam Byrd, R-New Richmond, on Tuesday. “We believe these changes are vital for stable governance to safeguard the pensions of hardworking teachers, both current and future.”

Byrd, who drafted the regulations, mentioned that concerns regarding the pension fund’s management prompted the changes.

“There were definitely numerous concerns about how the state’s teacher retirement system was being managed,” House Finance Chair Brian Stewart (R-Ashville) noted during the budget discussions.

A report from News 5 highlighted allegations of internal conflict, two board resignations, and issues relating to public corruption and mismanagement of funds. There were also terminations of senior staff along with at least two resignations.

A whistleblower memo presented to DeWine in May raised alarms about rapid changes within STR amid a brewing public corruption scandal.

Attorney General Dave Yost indicated he was looking into a “scheme” involving former board members Wade Steen and Rudy Fichtenbaum shortly after initiating a lawsuit to remove them from the board.

The memo described a “conspiracy” surrounding former Ohio Vice Treasurer Seth Metcalfe and an investment startup, QED Technology, led by Jonathan (JD) Tremel, which sought a contract that would allow them access to a significant portion of the STRS assets, then valued around $65 billion. It suggested QED had influenced board member elections to favor their interests.

Investigations into these alleged schemes have continued throughout the year, including discussions with DeWine.

Governor DeWine expressed serious concerns following a report in April 2025, which revealed numerous text exchanges regarding the connection between Steen and QED members.

Both Steen and Fichtenbaum continue to assert their innocence, claiming that Yost and DeWine are part of a “political plan” aiming to enhance transparency while restricting educators’ influence over investment strategies. They are viewed as leaders of a “reform movement.”

The ongoing conflict is rooted in the debate over whether STRS should invest through actively managed funds, which typically aim to outperform the stock market, or opt for index funds that are passive with generally lower fees.

In brief, “reformers” are advocating for a transition to index funding, while others prefer to maintain the active management approach. Recent board elections have tilted in favor of members aligned with the reform views.

Steen and Metcalfe have engaged in dialogue to address the governor’s statements.