By Erik Jones | Lorain Daily
The money saved for over 500,000 teachers in Ohio is at the center of a growing scandal. The State Teachers Retirement System (STRS) manages about $100 billion for current and retired educators. But recent reports show serious concerns about how that money is being handled — and who is influencing those decisions.
Governor DeWine Finally Speaks Out
Governor Mike DeWine recently spoke in a one-on-one interview about the controversy. He said he was shocked after reading hundreds of private text messages showing close contact between a former board member and an investment firm. The messages suggest that a firm with little experience was trying to gain control of billions in pension funds by influencing STRS board members.
The firm, QED Technologies, is run by Seth Metcalf, a former Ohio Deputy Treasurer, and Jonathan “JD” Tremmel. Records show they had a very close relationship with board member Wade Steen, who was reappointed by DeWine in 2020.
Steen, along with board chair Rudy Fichtenbaum, is accused of working behind the scenes to help QED. They allegedly pushed STRS to change how it invests money — and even used talking points and questions fed to them directly by QED during board meetings.
The Secret Messages That Sparked It All
In 2024, DeWine received an anonymous 14-page memo written by STRS staff. It warned of a corruption scheme involving QED and several board members. It said QED had no clients, no track record, and no legal registration to manage investments. Yet, they were aggressively pushing to manage large parts of the STRS fund.
Through public records requests and court filings, reporters found hundreds of text messages between QED and Steen. In the messages, QED told Steen what to say during meetings, which documents to bring up, and when to force a vote. Some texts even cheered Steen on after meetings, thanking him for helping move their plan forward.
The governor said this kind of relationship is “highly unusual” and “very concerning.”
A Fight Over Control
The issue at the heart of this scandal is how the pension fund should be invested. STRS currently uses actively managed funds, which involve many experts trying to beat the stock market. Some members, including Steen and Fichtenbaum, want to switch to index funds, which follow the market more simply and often cost less.
This split has caused tension on the board for years. Reformers say switching to index funds would save money and make investing simpler. But critics worry about giving control to firms like QED, especially without a proven record.
QED and a group called the Ohio Retirement for Teachers Association (ORTA) were reportedly working together to get reform-friendly members elected to the board. In 2023, Steen refused to resign after DeWine asked him to step down. A court later ruled DeWine couldn’t legally remove him. Steen was returned to the board in 2024 but later became the focus of a lawsuit filed by Ohio Attorney General Dave Yost.
The Lawsuit and What’s at Stake
Attorney General Yost is suing Steen and Fichtenbaum, claiming they broke their duties to STRS by helping QED get closer to controlling pension investments. The lawsuit says they violated trust by working too closely with a company that stood to profit if chosen.
Subpoenas have been filed, and investigations are ongoing. QED still claims they can help improve the pension system and denies doing anything illegal.
Meanwhile, many teachers are left wondering: who is protecting their money?
Teachers Want Answers
Retired teachers have shared their frustrations about cost-of-living adjustments being frozen and the high salaries and bonuses paid to STRS investment staff. Some say they feel ignored or misled.
STRS investment staff earn high base salaries plus bonuses. In 2023, the average pay with bonuses reached over $230,000 per person. After reformers tried to cut these bonuses, the STRS board’s compensation advisor quit, and their legal team warned that cutting them might break the law. Bonuses were later restored.
Governor DeWine said these are valid concerns and that retired teachers deserve to know how their money is managed. “Teachers are the people who educate our kids,” he said. “We need to do the best we can for them.”
Could It Happen Again?
One major concern is how future investment firms are selected. A recent attempt by the board to hire another firm — one that had ties to board members and little experience — raised more red flags. After public pressure, that hiring plan was dropped.
There are also concerns about board members using encrypted apps like Signal to delete conversations automatically. This makes it harder for reporters or citizens to access public records and understand what’s really happening behind the scenes. Governor DeWine said current laws might need to change if technology is being used to avoid transparency.
Reform or Risk?
Some lawmakers are now talking about reducing the power of teacher-elected board members. That suggestion has caused even more debate, with many saying it would take away teachers’ voices in their own retirement system. DeWine said he isn’t pushing for that kind of change and believes the board’s job is to hire trusted experts — not make risky decisions on their own.
He also said he does not plan to reappoint Steen and warned that putting him in another leadership role at STRS would be a mistake.
What Comes Next?
The future of STRS remains uncertain. Lawsuits are still playing out. Board elections continue. And new investment decisions are always on the horizon.
But one thing is clear: the public is watching more closely now.
Governor DeWine says that’s a good thing. “When you have the public’s eyes on this, decisions are more likely to be made the right way — in the open, for everyone to see.”
For now, teachers, retirees, and taxpayers across Ohio will keep asking the same question: Who’s really watching the teachers’ money?
Interesting that a Lorain teacher is on that board.