Here's an explanation of what happened and what it means:
PSERS has more than 500,000 members, about half of them teachers, and should not be confused with SERS, which is the State Employees' Retirement System that has far fewer retirees.
Currently, PSERS is valued at about
A 15-member board oversees PSERS.
Board members include the state secretaries of banking and securities, and education; the treasurer; an appointee of the governor (currently vacant); five retired or working system members; two school board representatives; two state House members, one from each party; and two state
In late March, the PSERS board announced that it was investigating a consultant's apparently incorrect risk-sharing calculation concerning the fund's investment performance.
The Associated Press reported that the calculation, which was 6.38% growth over the nine-year period ending
If the risk-sharing calculation were wrong and growth fell under the 6.36% threshold, then PSERS members who were hired after 2011 would have to contribute more.
Again, the move would only affect school workers hired after 2011.
According to the AP, most school employees would have their contributions increase by 0.5% of their salary while some will have to pay 0.75% more of their salary.
However, the AP reported at the time that state Sen.
“The current statute as written, without amendment, requires us to change the law before we're able to recertify,” Browne said.
Taxpayers will be responsible to make up the difference if the law is not changed, and PSERS has refused to say how much money is involved.
In a statement, audit committee chairman and state Rep.
Ryan also said that “no personnel changes have been made whatsoever at PSERS.”
If that wasn't enough, PSERS has also been served with federal grand jury subpoenas related to a real estate probe out of the
Per reports from the Inquirer and PennLive.com, the FBI investigation is centered on the purchase of properties in
PennLive.com said PSERS has not revealed any plans for the property and that it was purchased by a company for PSERS for
Also, the Inquirer reported that the FBI is investigating other property purchases, including parking lots in
One source has told the
“PSERS must continue to conduct a full review of its operations to discover how this error occurred and ensure that it never happens again,” Lilienthal said.
“PSEA members contribute to their pension fund year in and year out, and PSERS needs to do everything possible to protect the retirement security they have earned and paid for.”
On Monday, PSERS announced that there would be a special board meeting held at
An agenda for the meeting can be found at psers.pa.gov.
J.D. Prose is a reporter for the
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