Wagner: Auditor General Highlights Pension Fund Mismanagement

Listen

HARRISBURG – Citing recent audits completed by Auditor General Eugene DePasquale, Senator Scott Wagner (R-York) is calling on Governor Tom Wolf and the boards of the state’s two pension funds to deliver better results to both taxpayers and public employees.

“Governor Tom Wolf and the legislature should not even discuss tax increases until the state’s top two pension funds are completely overhauled to achieve better results for both taxpayers and public employees,” Wagner said. “It is incomprehensible how we achieve such pathetic results while other states are having banner years.”

During a news conference highlighting the State Employees’ Retirement System (SERS) audit’s findings Thursday morning, Auditor General DePasquale noted that Illinois’ pension system had a return of 12 percent, California’s public employee pension fund had a return of 11.2 percent while its public school employee pension fund had a 13.4 percent return. Connecticut’s public pension fund had a return of 14.4 percent. Meanwhile, Pennsylvania’s Public School Employees’ Retirement System (PSERS) had a 1.29 percent return on investment while the SERS had a 6.5 percent return on investment in 2016. The national median return was 12.4 percent, according to the Wall Street Journal.

“We would not even have a discussion of tax hikes or potential credit downgrades if Pennsylvania had achieved anywhere close to the results these other states realized last year,” Wagner said. “The mismanagement of the state’s two pension funds should be a major cause for concern for taxpayers and public employees alike.”

“How much longer will Governor Wolf and the boards of these two public pension systems squander investments and fail to live up to the low benchmarks they set each year?,” Wagner asked. “We are upside down in our approach to solving the pension crisis – we pay some of the highest fees to Wall Street money managers while missing very low benchmarks and coming nowhere close to the national average return.”