Pennsylvania’s auditor general wants to see the state’s biggest pension fund managers reduce their reliance on Wall Street investments.
The Public School Employees’ Retirement System and the Pennsylvania State Employees’ Retirement System – two of the state’s largest public pension funds – are now funded at just 70 percent.
That means the state is carrying roughly $40 billion of unfunded debt.
Auditor General Eugene DePasquale say that’s a big problem.
At a Thursday afternoon news conference in Norristown, he called on the leaders of those funds to depend less on hedge funds, be more transparent and negotiate lower fees for fund management.
“You’re talking about tens of millions of dollars that literally go outside of Pennsylvania that should be going into our pension funds to help make our retirement more secure for our state workers and our teachers,” said DePasquale.
DePasquale said the state could save up to $30 million a year just from reducing fees.
Still, any changes to the state’s pension funds will likely involve a lot of political wrangling.