Article: BWC to fire 69 investment managers

Posted on Thu, Nov. 17, 2005

Scandal-ridden workers' comp to fire 69 investment managers

Associated Press

COLUMBUS, Ohio - A committee overseeing Ohio's scandal-ridden insurance fund for injured workers voted Thursday to fire 69 managers of investment funds to allow the agency to shift money to more secure investments while it retools its financial policies.

Also Thursday, the committee said in a report that without changes the financial outlook for the Bureau of Workers' Compensation is bleak because it currently spends $1.31 for every $1 it collects from employers.

The agency's surplus, currently at $1.1 billion, needs to be larger to properly manage the worker's comp bureau, said Michael Koetters, a member of the Workers' Compensation Oversight Commission appointed earlier this year for his investment expertise.

"This is a bleak condition in terms of profit and loss," Koetters said. "It's bleak in terms of the balance sheet."

In a 90-minute meeting that focused on the agency's future, the commission voted to fire six international and 44 domestic managers of equity funds, or funds that invest primarily in stocks.

The committee also voted to fire 19 fixed-income managers, who oversee less risky funds such as those investing in bonds that pay a specific interest rate.

Workers' comp officials say the fund managers did nothing wrong but it was easier to dismiss them all so the agency can start with a clean slate.

The agency has been overhauling its financial strategy since revelations last spring that it lost more than $300 million in investments, including $13 million in rare coins and $215 million in a hedge fund.