More than two dozen Indiana schools will recoup some of their losses after the state and the Indiana State Teachers Association reached a settlement in a lawsuit over what state officials call a “Ponzi scheme” involving the union’s failed health insurance fund.
Indiana Public Broadcasting reporter Brandon Smith has the story:
The lawsuit, filed four years ago by the state securities commissioner, involves a medical plan offered by the ISTA to teachers and school employees.
The state charges that the funds were improperly used on risky investments and to pay off long-term disability claims.
Secretary of State Connie Lawson Tuesday announced a $14 million settlement has been agreed to in principle.
The schools lost $27 million dollars, meaning the settlement will pay back about 50 cents on the dollar, but Lawson says schools have been waiting long enough.
“We heard from schools that they wanted to get their money back but also they were needing the money as soon as possible,” Lawson said.
ISTA spokesperson Mark Shoup says the settlement is the fairest resolution for all parties involved.
“Our goal all along was to make sure that school employees — school districts and the school employees — who were a part of this recovered payments and this allows that to happen,” Shoup said.
All 27 school corporations will have to agree to the settlement for it to go through.