Three major educator organizations in Ohio have initiated legal action to block a new state law that significantly alters the composition of the State Teachers Retirement System (STRS) board. The lawsuit, filed in Franklin County, challenges a provision that shifts the board's majority from elected educators to members appointed by state officials.
Key Takeaways
- Educator groups filed a lawsuit to halt a new law changing the STRS board structure.
- The law will reduce elected members from seven to three and increase appointed members from four to eight by 2028.
- The lawsuit claims the law violates the Ohio Constitution's equal protection, single-subject, and three-considerations rules.
- State officials argue the changes are necessary to ensure stable governance of the $91 billion pension fund.
Educator Groups Challenge New Law in Court
The Ohio Education Association, the Ohio Federation of Teachers, and the Ohio Conference of the American Association of University Professors filed the lawsuit on Tuesday in the Franklin County Court of Common Pleas. The groups argue that the legislative changes unfairly target teachers and strip them of their right to oversee their own retirement funds.
At the center of the dispute is a provision included in the state's operating budget passed in June. This provision restructures the 11-member STRS board, which manages a pension fund valued at approximately $91 billion.
Glenetta Kraus, a Cincinnati Public School teacher and the lead plaintiff, stated the lawsuit's purpose clearly. "This lawsuit is about restoring fairness and protecting our fundamental right to have a say in how our retirement is managed," Kraus said.
Shift in Board Composition
The current structure of the STRS board gives a majority to educators. It consists of seven members elected by teachers and retirees, with the remaining four appointed by state officials. The new law reverses this dynamic completely.
STRS Board Transformation by 2028
- Current Structure: 7 Elected Members, 4 Appointed Members
- Future Structure: 3 Elected Members, 8 Appointed Members
Under the new legislation, four elected positions will be phased out and replaced with four new appointed positions by 2028. This will result in a board controlled by eight political appointees, leaving only three members elected by the teachers and retirees whose pensions are at stake.
State's Rationale and Board's Tumultuous History
Republican lawmakers who supported the measure contend that the change is necessary to bring stability to the STRS. The system has faced years of internal conflict, leadership changes, and frustration among its members.
"We stand by the law that was passed," said Rep. Adam Bird, a Republican from Clermont County. "We believe the change was needed to provide stable governance to protect the pensions for hardworking teachers, current retirees, and future retirees."
Background of the Board Dispute
The move to restructure the board follows a period of significant controversy. Retirees grew increasingly frustrated after not receiving cost-of-living adjustments (COLAs) between 2017 and 2022. This led to a movement where retirees elected "reform" candidates to the board. In 2024, Attorney General Dave Yost sought the removal of two of these board members, Wade Steen and Rudy Fichtenbaum, accusing them of trying to direct STRS funds to an unproven investment firm, QED Technologies. Both men have denied any wrongdoing.
Supporters of the new law believe that ongoing internal disputes weaken the fund. "I don’t think chaos strengthens the fund," Bird commented in June, adding that the change ensures promises to teachers can be kept.
However, others argue the board was already making progress. David Quolke, a retired teacher and past president of the Cleveland teachers' union, noted that the board recently approved a 1.5% COLA and improved retirement eligibility rules.
Constitutional Arguments Form Basis of Lawsuit
The lawsuit filed by the educator unions is not based on whether the legislature has the authority to change pension systems, but on *how* this specific change was made. The plaintiffs present three primary constitutional arguments against the law.
Key Legal Claims
- Equal Protection: The lawsuit argues that the law unfairly singles out the STRS. Ohio has five public pension systems, and this change would make the STRS the only one where elected members are in the minority.
- Single-Subject Rule: Ohio's constitution requires that legislative bills address only one subject. The unions contend that because the STRS is not funded by the state, changing its board structure has no place in the state's operating budget.
- Three Considerations Rule: The constitution also mandates that every bill be considered on three separate days in each legislative chamber. The unions claim the STRS provision was added at the last minute during budget negotiations, preventing it from receiving the required public hearings and scrutiny.
"By hijacking control of our pension fund, legislators are sending a thinly veiled threat to the other public pensions in Ohio, ‘if you make decisions we don’t like, we’ll take control of your pension too.’"
- Kevin Cain, retired teacher and plaintiff
While lawmakers generally have broad authority over the state's public pension systems, the case will hinge on whether the court finds that the process used to pass this specific provision violated the Ohio Constitution. The state maintains the law is valid and will be upheld, setting the stage for a significant legal battle over the future of teacher pension governance in Ohio.
