Independent audit report shows OP&F is well run; good steward of funds

A report summarizing the required fiduciary audit of the Ohio Police & Fire Pension Fund (OP&F) has been released by the Ohio Retirement Study Council (ORSC). The report shows that “The OP&F Board appears to have acted with loyalty and impartiality solely in the interests of current and future members and beneficiaries.”

The audit was conducted by Funston Advisory Services, LLC who was hired by the ORSC. A fiduciary audit of each of Ohio’s five public pension systems is required every 10 years. OP&F is responsible for the cost of the audit, which was in excess of $600,000.

“The OP&F Board and staff are happy to confirm our successes and for the opportunity to improve and strengthen areas mentioned in the audit report,” said OP&F Executive Director Mary Beth Foley. “OP&F has established a financially sound pension fund, administered within the requirements established by the General Assembly in the Ohio Revised Code. Our disability, financial and investment portfolio management programs are routinely recognized for excellence.”

“We will share this report with legislators,” Foley continued. ”It is my hope that this gives them the confidence to use House Bill 512 to correct the unequal and insufficient funding provisions. After nearly 40 years, it is time to revisit and properly fund public safety retirement benefits.”

Among the observations that Funston reported in their audit report:

• “OP&F appears to effectively control costs while maintaining high performance standards.”
• “The OP&F Board of Trustees generally has leading practice authorities for budgets, staffing, and setting compensation and procurement.”
• “The OP&F Board appears to act with appropriate prudence and care.”
• OP&F’s 10-year performance is in the top quartile (14%) among peer public pension funds.
• OP&F appears to have appropriate people, policies and processes to comply with the law and reporting requirements.”
• “OP&F takes its recordkeeping and management responsibilities seriously.”
• “OP&F has leading or prevailing practices for managing external manager fees both in public accounts and in alternative based accounts.”
• “There are organizational checks and balances that provide effective controls and minimize the potential for single point of failure decision making.”
• “The OP&F Finance and Accounting function is capable, and the accounting systems are effective.”
• OP&F has appropriate ethics policies and standards of conduct in place.
• We were particularly impressed by the level of respect and caring both the Board and Staff pay to the Plan beneficiaries – the police and fire officers of Ohio.
• OP&F has a “small, but highly qualified in-house investment staff.”

Beyond the required fiduciary performance audit, the 238-page report also includes some operational recommendations for improvement that will be evaluated by the OP&F Board. The full report can be found at: https://orsc.org/Assets/Reports/1509.pdf

Posted 8/08/2022