Attorney Edward Mannino, who represents the Public School Employees’ Retirement System (PSERS) and the State Employees’ Retirement System (SERS), told Commonwealth Court judges that Auditor General Robert Casey’s only interest in auditing the funds’ investment is to add fodder to his political agenda. Rather, Mannino said Casey should have an independent, outside auditor examine the performance of the two boards – one who might have more expertise in evaluating pension funds, according to an Associated Press report.
Together, the two funds manage more than $67 billion in assets for approximately 580,000 government workers and retirees.
Mannino’s argument is the latest step in the ongoing battle between the funds and Casey. The funds argue Casey does not have the authority to conduct the audits while Casey contends he has both constitutional and statutory authority for the audits. Attempting to enforce his authority, Casey has said he is interested in scrutinizing how the boards’ overseeing the two huge funds select and monitor the teams of private-sector advisers who help direct where the systems invest their money. The funds have refused to provide Casey with any information.
Yet this has not deterred Casey, who in January asked the courts to force PSERS and SERS to “consent to and cooperate with” the Auditor General’s audits and to turn over the documents Casey has demanded. This came after Casey issued subpoenas to PSERS Chair State Treasurer Barbara Hafer and SERS Chair Nicholas Maiale when they refused to provide the Auditor General with crucial documents regarding the Funds’ investment operations (See PA. Auditor General Subpoenas Public Pension Funds ).
Predictably, the ongoing battle has put DemocratCasey at odds with state Treasurer Barbara Hafer , a Republican. Casey is running against Republican Jean Craige Pepper to replace Hafer as treasurer when her term ends in January and it is those political interest that Mannino says have taken over in this case.
Judge Dan Pellegrini met that argument with some skepticism. “Why are you opposing this so vigorously?” Pellegrini asked, noting that many of the documents Casey had requested from the boards were public records. “He has the right, as the auditor general, to do a performance audit and say whether you’re doing a good job or a bad job.”
In fact, as of June 30, 2003, PSERS has 44.2% of its assets in domestic stocks, 17.8% in international stocks, 20.8% in domestic and international fixed income investments, 8.9% in alternative investments, 6.7% in real estate, and 1.6% in cash and cash equivalents.
No indication was given by theCommonwealth Court when it would rule on the case.
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