Pennsylvania Pension Systems Under Scrutiny
The Keystone State’s two largest public pension systems — the Public Employees’ Retirement System (PERS) and the School Employees’ Retirement System (SERS) — are under scrutiny concerning their finances.
Pennsylvania Auditor General Eugene DePasquale announced Aug. 23
that he will review PERS and SERS in order to assess how well they have implemented recommendations he made to them in the wake of his 2017 audits. He had sought increased transparency from PERS and SERS as well as lower fees.
Meanwhile, the investment strategies employed with PERS and SERS funds also are under examination. Pennsylvania Treasurer Joe Torsella
has reported that PERS and SERS spent more than $5.5 billion in fees that they would not have if they had followed different investment strategies.
Pennsylvania’s Public Pension Management and Asset Investment Review Commission
held the first of three scheduled hearings on July 30. The Commission, which was created in 2017 as part of pension reform, is to review the costs and benefits of the PERS and SERS investment strategies and to make recommendations regarding how the systems can save $3 billion over the next 30 years. The Commission is to issue a report to the governor and the legislature by Nov. 30, 2018.
Commission Chair Rep. Mike Tobash (R-Schuykill/Dauphin) hinted at the hearing that litigation may be the result if PERS and SERS’ finances are not put in order, noting that lawsuits are “not uncommon today” and remarking that in such instances, he asks himself, “When is the day going to occur when defined benefit participants start going back after, or taxpayers start going back after the fiduciaries of defined benefit plans?”