July 27, 2016 |
HARRISBURG - State examiners will launch a fresh look at the pension systems that manage about $78 billion in assets for hundreds of thousands of public employees and retirees, the state's top auditor said Monday. Auditor General Eugene DePasquale told reporters that he is particularly interested in fees paid to outside investment managers. "We're paying them a lot of money," DePasquale said in a conference call. "What are we getting in return?" He announced the planned audits days after federal prosecutors filed false-statement charges against former state Treasurer Barbara Hafer and fraud counts against a Philadelphia-area businessman, Richard Ireland, over contracts he arranged for the management of state money.
March 14, 2016 |
Last week, Gov. Wolf applauded Pennsylvania's underfunded retirement plans - SERS (state employees), PSERS (public school employees) - for trimming the fees they pay private money-management firms. Those fees are down $103 million at PSERS and $16 million at SERS from the levels of two years ago. As it was, the state paid about $600 million last year to JPMorgan , BlackRock , the Independence Capital funds, and hundreds of other portfolio managers to direct $75 billion in pension investments.
March 13, 2016 |
The $52-billion-asset Pennsylvania Public School Employees' Retirement System lost money last year, trailing the performance of the Pennsylvania and New Jersey state worker pension investment returns for 2015, according to a report the system released Friday. PSERS reported losing 1.8 percent for the 12 months ended Dec. 31. SERS , the Pennsylvania state workers' fund, last month reported a gain of 0.5 percent for 2015. NJDI , the New Jersey Division of Investment, reported a gain of 0.6 percent.
April 17, 2015 |
After a "national search," Pennsylvania's underfunded Public School Employees' Retirement System , based in Harrisburg, said Wednesday that it has offered its top job to a candidate from close to home: State Rep. Glen R. Grell (R., Cumberland). Grell's predecessor, Jeffrey Clay , who retired a year ago, was paid $237,000 a year, which would be a big raise over the $86,000 Grell earned as a state representative. He is "still negotiating" his pay with PSERS, spokeswoman Evelyn T. Williams told me. In a statement, Grell said he would miss representing his Harrisburg-area district, and thanked the PSERS trustees who selected him. The trustees - aides to the governor, teacher and school board representatives, and lawmakers - are familiar faces to Grell because he was a member of the board until January, when he was replaced by state House leaders with Rep. Stephen Bloom , also a Cumberland County Republican.
March 23, 2015 |
Gov. Wolf is trying to push Wall Street out of Harrisburg. He wants the two big employee retirement systems, SERS (for state workers) and PSERS (for public school staff), to reverse their long reliance on high-fee managers. These firms collected more than $600 million in fees from the plans last year - plus a share of liquidation profits from the state's private-equity investments, which Pennsylvania doesn't count. Despite all the creative investing, years of underfunding have left SERS and PSERS with multibillion- dollar gaps between the assets they own and the checks they will owe. The shortfall has been addressed in recent years by increasing taxpayer "contributions," which Wolf wants to stabilize.
February 2, 2015 |
Worn power tools, VCRs, patio furniture: Sometimes it's time to load old treasures in the trunk, head to the flea market, and see what you can get for them. The underfunded Pennsylvania Public School Employees' Retirement System has that kind of problem. As of last year, 35 percent of its $52 billion in pension assets was invested in private-equity funds, real estate, and other private investments you can't trade on the stock or bond markets. Some of these private investments were quite profitable; some lost money.
October 6, 2014 |
Struggling to raise cash for future pensions without bigger taxpayer bailouts, state workers' and teachers' retirement plans in the last dozen years or so have sought higher returns by betting on "alternative" investments not traded on public markets: hedge funds, real estate, private equity. Hedge-fund managers have collected billions in fees, but their returns have mostly trailed stocks in recent years. The largest U.S. pension plan, the California Public Employees Retirement System , plans to dump its $4 billion hedge-fund portfolio, citing "complexity, cost," and the difficulty of buying enough good ones.
June 3, 2014 |
Pennsylvania's Public School Employees Retirement System (PSERS), the 18th-largest state-sponsored, defined-benefit public pension fund in the nation, runs money for more than 400,000 teachers and retirees. And PSERS likes hedge funds. But are hedge funds worth it? PSERS oversees assets of $50.4 billion. Roughly 10 percent, or $5 billion, of that is invested in hedge funds, which generally charge 2 percent of assets and 20 percent of performance annually. An index mutual fund typically charges much less, say, 0.50 percent a year.
May 31, 2014 |
The underfunded Pennsylvania Public School Employees Retirement System has deleted contracts with "alternative investment" funds - that invest billions of dollars in teachers' retirement money - from the website of the state's Treasury Department . The decision to no longer make the contracts available for public scrutiny was confirmed Thursday by Evelyn Tatkovski , a spokeswoman for PSERS. I had asked PSERS about claims by Susan Webber , the New York financial consultant who runs the caustic website NakedCapitalism.com , that the posted documents had created a "Snowden moment.
March 17, 2014 |
Why don't they just hire Vanguard ? The Pennsylvania State Employees' Retirement System thought some explaining was in order. PSERS needed $1.4 billion from state and local property taxpayers last year, and it expects to need $2.7 billion next year, it told legislators in February in its yearly report. That's after paying $552 million to hundreds of private investment firms - more than half the total for private equity, private debt, hedge, venture capital, commodity, and other investments you can't buy from a broker - to keep its assets from sliding farther below its liabilities.