Bureau takes action to improve investments, operational controls Print E-mail
Friday, June 10, 2005

COLUMBUS – The Bureau of Workers’ Compensation (BWC) has announced a series of aggressive steps that were implemented during interim Administrator Tina Kielmeyer’s first week to improve its investment department and its overall operations while bringing greater control and accountability to BWC.

“I am pleased that Administrator Kielmeyer, BWC and the Management Review Team have acted swiftly to evaluate and make immediate operational improvements in their investments department,” Governor Bob Taft said. “Most importantly, the solvency of the Ohio’s workers’ compensation system is secure, and all injured workers will continue to receive the high-quality benefits they expect and deserve.”

“It is critical that the bureau move quickly to shore up any inefficiencies or operational control issues, and I have made that our top priority,” said interim Administrator Kielmeyer. “Our actions this first week will help us to establish a firm platform for conducting an exhaustive and thorough review of our investments and operations while restoring confidence in BWC.”

Administrator Kielmeyer, with the support of the Governor’s Management Review Team, will enlist the services of Ennis Knupp, a firm that has no affiliations with any brokerage, investment management or investment banking firms. In operation since 1981, it serves more than 140 clients with aggregate assets of $480 billion.

Ennis Knupp’s task will be to offer immediate investment management services on-site in preparation for the Management Review Team to conduct its analysis. The company’s specific focus will be in the areas of:

--Operational review and assistance of domestic/international equity and fixed income outside contracted investment manager’s compliance;
--Documentation and analysis of private equity relationships;
--Review and assistance with monthly performance reporting;
--Documentation for equity and fixed income in-house trading operations;
--Human resource assessment/requirements for performance of investments fiduciary responsibilities.

In addition, BWC has also:

--Placed the Chief Investments Officer on administrative leave;
--Required all contracts to be signed off by the Administrator;
--Released the names, allocations and market value of all current BWC investments.

BWC is also working with the Management Review Council to review each and every investment made. Jointly, they will examine whether the investment is appropriate, sufficient, controls are in place and if its performance is consistent with key benchmarks. The Management Review Team will report its initial findings back to the Governor on July 18.

The members of the Management Review Team are:

Tom Hayes: director of the Ohio Lottery Commission and team leader;
Laurie Fiori Hacking: executive director of the Ohio Public Employees Retirement System (OPERS), which manages approximately $65 billion in retirement assets;
James Nichols: treasurer of The Ohio State University since 1981.

Since 1995, BWC’s average annual investment return is 16.5 percent. The bureau has returned more than $10 billion in dividends to Ohio employers during that time.

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Media contact: Mark Rickel, Governor’s Office at (614) 644-0957 or Jeremy Jackson, Ohio Bureau of Workers’ Compensation, (614) 752-7558