New Executive Director Takes Over Ohio Pension Fund—Can They Fix What’s Broken?

New Executive Director Takes Over Ohio Pension Fund: The State Teachers Retirement System of Ohio (STRS Ohio) has a new leader at the helm — Steven C. Toole — and the stakes couldn’t be higher. After years of investment underperformance, benefit reductions, and public mistrust, the nearly $100 billion pension fund is facing a pivotal moment in its century-long history. More than 500,000 teachers, retirees, and school employees rely on this fund to secure their retirement. But with $20 billion in unfunded liabilities and accusations of financial mismanagement, the system is under immense pressure to change course. With Toole’s arrival, the big question now is: Can he fix what’s broken?

New Executive Director Takes Over Ohio Pension Fund

The appointment of Steven C. Toole as Executive Director of STRS Ohio signals a turning point — one rooted in hope, realism, and the demand for accountability. Toole has the experience, local ties, and strategic mindset to guide Ohio’s $96 billion pension system out of troubled waters.

But it won’t be easy. He must navigate a divided board, calm an angry membership, fix a $20 billion funding hole, and transition to a smarter investment model. The success of STRS Ohio is critical not only to retirees and educators but to the fiscal health of the entire state. This isn’t just about spreadsheets. It’s about promises made — and whether they’ll be kept.

What Is STRS Ohio and Why It Matters?

STRS Ohio is the primary retirement system for public school educators in Ohio, managing both defined benefit (traditional pensions) and defined contribution (401(k)-style) plans. The system covers teachers, counselors, and school administrators, including retirees.

The fund was designed to provide long-term stability and guaranteed income in retirement — but years of risky investments, lack of transparency, and benefit suspensions have left many questioning whether it’s still living up to that promise.

For current educators, STRS represents their future. For retirees, it’s their financial lifeline. For taxpayers, it’s a potential liability. If STRS falls short on obligations, Ohio may need to step in — and that comes straight from the state’s general fund.

Meet Steven C. Toole: A Native Son With a National Résumé

Steven Toole is no stranger to managing public pension funds. A graduate of The Ohio State University, he grew up near Columbus and brings decades of financial management experience from both the public and private sectors.

He most recently served as executive director of the North Carolina Retirement Systems, one of the nation’s best-funded pension systems. There, he oversaw:

• More than $100 billion in defined benefit assets
• Over $11 billion in 401(k)/457 plans
• 900,000+ public employees and retirees

Before that, he held leadership roles at Principal Financial Group and Nationwide Insurance, giving him rare insight into both institutional investing and retail retirement products.

“I’m deeply committed to public service and to returning STRS to the level of trust and performance our teachers deserve,” Toole said following his appointment.

A History of STRS Ohio’s Problems

To understand the challenge ahead, we need to understand how STRS got here. In the 1990s and early 2000s, STRS was well-funded and generous with benefits. But since the 2008 financial crisis, performance and trust have steadily eroded.

Recent Problems Include:

• Poor investment returns relative to peer funds
• Over $180 million/year paid in external manager fees
• A $525 million loss in a private equity fund that underperformed
• Suspended cost-of-living adjustments (COLAs) for retirees
• Accusations of mismanagement and lack of transparency
• A lawsuit alleging a $65 billion corruption scheme involving a former board chair (ongoing)

STRS Ohio also saw frequent leadership turnover, with the board divided between pro-reform and status-quo factions. Teachers, organized through groups like the Ohio STRS Watchdogs and the Ohio Retired Teachers Association (ORTA), demanded changes — culminating in the appointment of Toole.

What Tool Needs to Fix — and How He Might Do It

1. Fixing Governance and Rebuilding Trust

STRS’s board has been accused of operating in the shadows, avoiding hard questions about investment strategy, and failing to clearly communicate with members.

Toole’s plan reportedly includes:

• Publishing real-time investment reports
• Opening up meeting access for all members
• Establishing a member advisory council
• Hiring an independent performance auditor

Transparency isn’t just a buzzword — it’s how trust is rebuilt. Teachers want to know what’s happening with their money.

2. Rethinking Investment Strategy

Historically, STRS relied heavily on active management — paying investment firms large fees to try to beat the market. But the returns didn’t justify the costs.

According to the S&P SPIVA report, more than 85% of actively managed large-cap U.S. funds underperform passive benchmarks like the S&P 500 over a 10-year period.

Toole is expected to consider:

• Shifting toward low-cost index funds
• Reducing private equity and hedge fund exposure
• Implementing performance-based compensation for managers

This approach mirrors the North Carolina model, which performed well under his leadership.

3. Restoring Cost-of-Living Adjustments (COLAs)

COLAs — adjustments to benefits that help retirees keep up with inflation — were suspended in 2017. With inflation spiking in recent years, this has hit retirees hard.

Retired teacher Nancy Zawodny recently told local media:
“We gave our lives to teaching, and now we’re falling behind because of inflation. We feel betrayed.”

Toole has publicly stated that restoring COLAs is a priority, but it must be done responsibly. Options under review include:

• Conditional COLAs based on annual fund performance
• Tiered COLAs that give larger boosts to older or lower-income retirees
• A 5-year roadmap to restore permanent adjustments if certain funding benchmarks are met

4. Addressing the $20 Billion Shortfall

According to STRS’s 2024 valuation report, the system is only 83% funded. That may sound high, but in pension terms, it’s a red flag.

If STRS can’t close that gap, it may be forced to:

• Raise employer or employee contributions
• Reduce future benefit accruals
• Increase retirement age or service years

Toole must balance fiscal discipline with compassion — and communicate changes clearly to avoid backlash.

What New Executive Director Takes Over Ohio Pension Fund Means for Ohio Teachers and Taxpayers?

If you’re a teacher or school employee, this leadership change represents a reset — a new opportunity for the system to prioritize your future, not just Wall Street returns.

If you’re a retiree, you may finally see your COLA restored or, at the very least, get a clearer picture of when and how that might happen.

If you’re a taxpayer, STRS must become more sustainable. Mismanagement in large public pensions often results in higher taxes or reduced services when the state has to intervene. Reform now can prevent crisis later.

What to Watch in 2025 and Beyond?

Here’s what to expect over the next 12 months:

• July 2025: Toole officially takes office
• Q3 2025: Internal review of investment contracts and performance begins
• Fall 2025: First public update on COLA feasibility and strategy
• Early 2026: Formal recommendations on cost-saving and performance-enhancing reforms expected

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