Tag: Buck

PSERS and its troubles: A guide to the woes facing Pa.’s biggest pension plan

Mary Pat Campbell

Link: https://www.inquirer.com/business/psers-sers-pension-fbi-scandal-investigaton-teachers-20210411.html

Excerpt:

The board in December found that PSERS yearly investment returns had averaged 6.38% over the last nine years — just above the 6.36% threshold needed to avoid an increase in pension payments from 100,000 school employees hired since 2011.

In 2010, the state adopted a so-called “risk sharing” mandate that requires school staff to pay more, as taxpayers do, when PSERS investments underperform. The law mandated that the review in 2020 look at average returns over the past nine years.

Author(s): Joseph N. DiStefano, Craig R. McCoy

Publication Date: 11 April 2021

Publication Site: Philadelphia Inquirer

PSERS hires two outside law firms to investigate $25 million error

Mary Pat Campbell

Link: https://www.pennlive.com/news/2021/03/psers-hires-two-outside-law-firms-to-investigate-25-million-error.html

Excerpt:

In December, consulting actuary Buck reported that PSERS had reached a 6.38 percent average annual rate of return across the prior nine years, just barely above the minimum threshold of 6.36 percent and thus averting a rate increase.

Those calculations were called into question at the time and, more recently, PSERS admitted that they may have been incorrect.

On Friday night, after a nearly 2-hour-long executive session with no public discussion, PSERS’ audit committee approved hiring two law firms to investigate the error and offer recommendations.

Author(s): Wallace McKelvey

Publication Date: 19 March 2021

Publication Site: PennLive

Pennsylvania’s largest pension system investigates possible $25 million error

Mary Pat Campbell

Link: https://www.pennlive.com/news/2021/03/pennsylvanias-largest-pension-system-investigates-possible-25-million-error.html

Excerpt:

In December, PSERS consulting actuary Buck reported that the system’s investments had netted a 6.38 percent average annual rate of return over the nine previous fiscal years between 2011 and 2020. That meant employees were spared a contribution rate increase by slimmest of margins. The investment benchmark was a 6.36 percent rate of return.

The risk mandate, of course, was a response to the system’s chronic underfunding. According to the most recent estimates, which themselves are fungible, the system reported an unfunded pension liability of at least $44 billion. That means it has just over 59 percent of the money necessary to meet current pension obligations.

On Friday night, the system’s board of trustees announced an audit, including the possible hiring of an outside firm to investigate, after it was “made aware of an error regarding the reporting of investment performance numbers.”

Author(s): Wallace McKelvey

Publication Date: 13 March 2021

Publication Site: PennLive