Pa subpoenaed by the SEC for “rewards and gifts” for staff. Fighting Teacher Pension Fund | Spotlight Pa


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U.S. Securities and Exchange Commission joins FBI Pennsylvania’s largest pension fund surveyThe subpoena records of the board’s adoption of false financial performance numbers and any inappropriate “rewards and gifts” that may have been provided to staff.

Government employees are prohibited from receiving such gifts under a ban Be taxed By Governor Tom Wolf. The subpoena issued to the PSERS school boarding system on Friday was the first sign that investigators were investigating the potential for freebies and money from investment advisers and consultants.

FBI and Federal Prosecutor Criminal investigation into $ 70 billion PSERS program launched in March Immediately after the fund’s board issued a brief statement in December, revealing belated suspicions about the numbers approved for the settlement.

Summons from prosecutors ordered senior PSERS officials to submit information about incorrect calculations to the jury. Buying property near Harrisberg headquarters..

While prosecutors and the FBI file criminal cases, the SEC pursues civil cases. It has a wide range of powers to impose fines, discipline financial professionals and order reforms. No one can be put in jail.

PSERS spokesman Steve Esack said on Saturday the fund had not commented on SEC actions.

The mathematical error in the board’s financial performance was not a minor error.

PSERS – Retirement Program for Public School Employees – oversees the pensions of over 500,000 active and retired educators. By state law, many school workers must pay more for their retirement plan if they fail to meet certain financial goals.

But in December, the 15-member PSERS board said the benefits were barely enough to avoid such increases for teachers. And in April Reversed the course And we adopted a new lower number. This has increased the payments of more than 100,000 teachers and other school staff employed since 2011. More senior teachers have received a pass.

From December to present, the Subpoena SEC is researching external and internal documents and communications regarding the “Error or Average Return Recalculation” and “Risk / Share” processes. Teachers share the risk and have to pay more if the performance is disappointing. They also requested records of the board votes, people familiar with the matter said. It was sent to Jackie Lutz, the fund’s chief advisor.

Securities firms have reportedly sued Hamilton Lane Advisors, LLC, a Philadelphia subsidiary that is considering investing in PSERS private investment firms for information on transactions with pension funds. The summons made it clear that Hamilton Lane was not the subject of the investigation. Hamilton Lane spokeswoman Katie McGann declined to comment.

Board members were notified of the new subpoena on Friday night by William Sullivan, attorney for the Pillsbury Winthropsaw Pitman Company in Washington. PSERS Hired his company in April To deal with federal inquiries. Sullivan is a former federal prosecutor and helps lead his company’s white corporate criminal defense and investigation team.

In addition to Pillsbury, the fund has brought together two law firms, Philadelphia-based Morgan Lewis & Bockius, and international firm Wombre Bond Dickinson, since the first subpoena. .. The pension plan also pays individual lawyers for at least eight employees.

The pension fund says next to nothing about miscalculations other than admitting the mistake six months ago. In an internal report obtained by Philadelphia Inquirer, it emerged that Chicago-based key consultant Aon Investment Consulting was responsible. The erroneous result was nothing more than a “business data entry error” by the staff.

The taxpayer-backed PSERS itself rejected the plaintiff’s claim for the error document submitted under state right to know law. The fund also warned Aon and two other consulting firms, ACA Compliance Group and BuckGlobal LLC, of ​​the request. The press calls for denial.

Last year, PSERS paid Aon $ 762,000 and Buck $ 226,000 for math work, among other tasks. We also paid $ 60,000 ACA to verify the calculations.

PSERS relies heavily on external consultants and fund managers, as the fund’s results lag behind those of other pension funds. Until this year, the fund allowed outside companies to make luxury reservations. TRAVEL PREPARATIONS For an investment unit made up of 60 members of the fund. The fund manager will pay the fees up front and PSERS will reimburse them later.

PSERS says it paid more than $ 700 million in fees and profit sharing last year to more than 150 Wall Street companies and other private money managers. Records also show he spent more than $ 14 million on consultants like Hamilton Lane, Aon, ACA and Buck Global.

When the December pension system passed a false number for its performance, it was passed despite opposition from three board members. The three who abandoned approval of the numbers were former Democratic Party Secretary of State Joseph Torsera. State Parliamentarian Frankrian (R., Lebanon); Richard Vague, Secretary of State for Banks appointed by Democrat Wolf.

At that time, the PSERS investment manager James H. Grossman Jr. told critics Their concerns were unfounded. “We were very careful,” he says. “We’ve got it covered. Do not worry.”

Torsera had already warned Senior PSERS executives said the plan uses new, unaudited data rather than its own previously certified number. PSERS declined to answer when asked if subsequent math exams confirmed Torsella’s criticisms.

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Pa subpoenaed by the SEC for “rewards and gifts” for staff. Fighting Teacher Pension Fund | Spotlight Pa

Pa subpoenaed by the SEC for “rewards and gifts” for staff. Fighting Teacher Pension Fund | Spotlight Pa

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