The normally sleepy meeting of the board that oversees Omaha Public Schools’ pension system got a jolt Wednesday night, as more than 50 retirees and current school staffers showed up for a special meeting to discuss how the pension board should be governed.
Several people spoke in support of measures that would give the Omaha School Employees Retirement System Board of Trustees more autonomy while distancing it from the reach of the OPS school board.
“I have mistrust of the school board, I’ll tell you that upfront,” retiree Walta Sue Dodd told the 10-member pension board, which includes three representatives from the OPS board and Superintendent Mark Evans.
After the meeting, Dodd said some retirees feel that the OPS school board has overstepped its bounds when it comes to the pension board.
“They have a different vision than what we have,” she said.
Over the past two years, the school board has taken a greater interest in the century-old pension system, and school board members have sometimes criticized the retirement board for what they perceived as risky investments, including a fund attached to foreclosures and distressed mortgages.
In 2014, the OSERS pension system was funded at about 75 percent, lagging behind the state school pension system, which was funded at about 90 percent of its liabilities. A new executive director for the system will also have to be hired in coming months — current director Michael Smith is retiring in December.
In May, a bill that would have taken investment decisions out of the hands of the OSERS board and transferred investing power to the Nebraska Investment Council, the body that handles the portfolio of the statewide school employees retirement system, died in the Legislature.
Another bill, which wasn’t advanced but was opposed by the school board, would have shrunk the OSERS board from 10 to seven members, cutting out the school board representatives, and putting the executive director and all OSERS staff under the pension board’s control.
The official agenda for Wednesday’s special meeting mentioned only discussion and possible action of board governance. But a paper passed out to the audience included five discussion points, including the selection of trustees and an executive director for the pension board, trustee term limits and questioning to whom the $1.2 billion pension fund’s executive director should report.
School board members Lou Ann Goding, Marian Fey and Marque Snow said the discussion points passed out contained far greater detail than the official agenda published, and Snow opined that one discussion point, on whether the pension board should be able to hire its own independent legal counsel, fell outside the topic of “board governance” and was in violation of the state Open Meetings Act.
“I take a more liberal approach to what board governance refers to,” pension board vice president Roger Rea said. “I’d like to hear the reaction of the audience to that concept. There’s an inherent conflict of interest in many people’s minds.”
Currently, OPS’s in-house and school board attorney, Megan Neiles-Brasch, also represents the pension board.
“No attorney I know of has two bosses,” retiree John Jensen said. “This attorney ethically cannot have two bosses at the same time and that’s what you’re asking her to do. That’s wrong. And yes, this is a governance issue.”
Board member Marian Fey said the discussion points passed out during the meeting were rehashing positions — longer trustee terms for member representatives for four years, direct election of member representatives to the pension board — that the school board had already agreed to.
“The inference is sometimes there’s conflict on these interests, and I want to state for the record that our position has not changed,” Fey said. “We came out in support of a bill that covers these points.”
Goding, the school board president, said the entire OSERS board — including school board members — was simply trying to make decisions to protect the pensions of former and current OPS staff.
“The solvency of this plan and the successful results we get are taken very, very seriously by the board of education and those of us who sit on the board of trustees,” she said.
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