The Associated Press

COLUMBUS - Employees who were denied performance bonuses under a now defunct incentive program sued the State Teachers Retirement System, saying the pension board acted arbitrarily and in bad faith.

The suit filed Friday in Franklin County Common Pleas Court seeks $1.8 million for 268 workers who weren't involved in investing money for the fund's thousands of retired Ohio educators.

The board voted 5-4 May 20 against paying the bonuses. At the same time, the board approved paying $2 million for 102 employees whose job involves investing money for the $54 billion retirement fund.

The board also voted in favor of eliminating bonuses for non-investment employees in the future.

Michael Szolosi Sr., a Columbus attorney who filed the lawsuit, said the bonuses for clerks, accountants and other employees were due in September 2003. The suit seeks temporary and permanent injunctions to prevent the retirement system from using the money set aside for the bonuses for other purposes.

The plaintiffs also want their bonuses plus an unspecified amount for interest, attorney fees and punitive damages, Szolosi said.

The suit said not getting the bonuses will affect employee retirement benefits.

The suit also accuses the system and board of arbitrarily setting a lower figure for calculating how much the bonuses should be.

The incentive bonuses are from a program that was suspended in the aftermath of revelations about excessive spending last year.

The retirement system serves more than 410,000 active and retired educators.