Taft outlines plan for separate oversight of Workers' Compensation investments Print E-mail
Friday, June 17, 2005

COLUMBUS (June 17, 2005) – Governor Taft today detailed his plan for sweeping changes that would place management of Bureau of Workers’ Compensation (BWC) investments under a new, independent board.

“While performing well in other duties, the Bureau has repeatedly failed to prudently and safely manage its investments. It’s time to separate the benefits administration from portfolio management. Interim Administrator Tina Kielmeyer and the Management Review Team I have appointed are aggressively working to define the entire scope of the investment problems and ensure that proper policies and controls are in place,” said Taft.

“But their work is only a start. They can stabilize the patient, but radical surgery is in order to make BWC’s investments function properly and professionally,” Taft added. “In order to provide injured workers and employers the peace of mind they deserve, responsibility of investments should be completely removed from the Bureau.”

Taft outlined reforms that would move all BWC investments under a separate, independent board. Taft proposed the following membership of the new seven-member Workers’ Compensation Investment Board:

--Five board members would be investment or financial management experts appointed as follows: two appointed by the state Treasurer; one appointed by the Governor; and two appointed by the General Assembly, one each appointed by the majority and minority party leadership.
--Two members would come from those serving on the BWC Oversight Commission, one being an employee representative and one representing employers.

Members of the board could serve two consecutive three-year terms, would meet monthly, and at least once per quarter would have joint meetings with the BWC Oversight Commission. In addition to being responsible for the current investment oversight duties currently under the BWC Oversight Commission, the new board would also be required to do the following:

--Hire a chief investment officer with extensive experience in making and administering investments;
--Be subject to an independent annual financial audit conducted under the authority of the Auditor of State;
--Publish annual audit findings and quarterly portfolio performance reports and deliver copies of all reports to the four leaders of the General Assembly, the Governor, Attorney General, State Auditor and State Treasurer.
--Require the chief investment officer to attend each Oversight Commission meeting and make a report at each meeting.

“The status quo is not an option,” Taft said. “While injured workers and employers can rest assured that our system is fully funded and insurance benefits are safe, BWC customers need to know that independent investment experts are professionally managing the assets of the fund. The legislature’s joint committee on workers’ compensation investments should make this issue its highest priority and see that this reform is enacted before the end of the year,” Taft added.

###

MEDIA CONTACT: Mark Rickel, Governor’s Office, at (614) 644-0957