A news release from Auditor General Jack Wagner said investigators from his office would also look at the recovery of monies lost in corporate scandals and efforts to invest in and contract with Pennsylvania firms. In addition to Wagner, the settlement of pending Supreme Court of Pennsylvania litigation over the Auditor General’s right to probe the pension systems also covered the Public School Employees’ Retirement System (PSERS) and the State Employees’ Retirement System (SERS) (See PA Pension Funds Agree to Investment Audit ).
According to the news release, the pact calls for
- Wagner’s office to conduct special performance audits of both funds that will include a look at the funds’ organizational structures and resources, as well as the appropriateness of the statutes governing the funds’ investments.
- Wagner’s office, PSERS, and SERS to hire Independent Fiduciary Services, Inc. (IFS) of Washington, DC, to conduct a comprehensive fiduciary review of the investment operations of both funds and to provide support for the Auditor General’s performance audits.
- both Wagner’s performance audits and the IFS fiduciary reviews to begin immediately, with entrance conferences to be held within the next two weeks, the announcement said. The final reports will be made available to the public.
- Wagner’s staff to examine whether the funds are complying with certain policies and procedures, and IFS will compare the funds’ policies and procedures with “best practices” at leading funds in other states.
PSERS is the 14th largest public pension fund in the nation and the 21st largest among public and corporate pension funds in the nation. As of December 31, 2004, PSERS had an investment portfolio of approximately $52 billion and a membership of more than 248,000 active school employees and 150,000 retirees. Established in 1923, SERS has assets of $26.6 billion and more than 200,000 members.