The Public Pension Management and Asset Investment Review Commission recently released a report that provides recommendations for improving the management and transparency of investment expenses and returns of the Public School Employees’ Retirement System (PSERS) and the Pennsylvania State Employees’ Retirement System (SERS).
The report found that there is a potential for both retirement systems to save between $97.3 and $116.8 million annually. Over 30 years, the actuarial savings would reach between $8.2 and $9.9 billion.
The report is the result of the commission’s seven-month review of the state’s pension systems in which the commission conducted three public hearings and heard testimony from investment experts.
“We commend the commission, and particularly its chairman, Rep. Mike Tobash (R-Schuylkill/Dauphin), for producing a thorough report to further improve the state’s taxpayer-funded pension system and produce more savings,” the York County Republican Delegation to the Pennsylvania House of Representatives said in a statement. “This evaluation lays out ways in which the systems can be placed on more solid financial footing.”
The York County Republican Delegation to the Pennsylvania House of Representatives includes Reps. Seth Grove (R-Dover), Dawn Keefer (R-Dillsburg), Kate Klunk (R-Hanover), Keith Gillespie (R-Hellam) and House Appropriations Chairman Stan Saylor (R-Red Lion).
The recommendations from the report include maintaining the full payment of the annual actuarially determined contribution amount; establishing a Central Investment Office; enacting legislation requiring annual stress testing; increasing transparency of investment cost, performance, and benchmarks; enacting legislation requiring increased public reporting of investment expenses; moving to fully index all public market investments in both public equities and fixed income; and adopting measures to reduce risk.
Gov. Tom Wolf endorsed the recommendation at a Capitol news conference last week.
“These bipartisan recommendations give us a roadmap to continue the tremendous progress we’ve made on pensions,” Wolf said. “These are commonsense reforms that will rein in excessive fees, increase transparency and keep billions of dollars in Pennsylvania rather than going into the pockets of Wall Street bankers.”
The Public Pension Management and Asset Investment Review Commission was created by the pension reform law signed into law in June 2017.
“We have a responsibility to keep the promises that are made and make sure our pension systems are sound, not only for current and future retirees but for all taxpayers,” the York County Republican Delegation said. “As policymakers, we look forward to further examining these potential savings, and other recommendations mapped out in the report as we enter the 2019-20 session.”