Pennsylvania State Employees' Retirement System, Harrisburg, plans to reduce the amount of fees paid to money managers, confirmed Pamela Hile, spokeswoman for the $27.6 billion pension fund.
The PennSERS board, at its Sept. 13 meeting, directed its staff to conduct a study on how to provide a plan by the end of this year to reduce the total investment fees paid to external managers over a three-year period. The study will be done in partnership with the pension fund's general investment consultant, RVK.
Pennsylvania Treasurer Joe Torsella praised PennSERS for adopting the resolution. "I commend the SERS board for supporting action that will save Pennsylvania taxpayer money and improve returns to the pension fund by reducing the amount of Wall Street fees paid by SERS," Mr. Torsella said in a news release.
"SERS has recently taken initial action to reduce fees. We need to go further, and reduce fees by 30% over the next three years," he added. "Adopting this resolution serves as a tremendous step forward in making SERS a national leader in fighting against outrageous fees."
On April 13, Mr. Torsella and Pennsylvania Gov. Tom Wolf announced that they had written to the boards of both PennSERS and the $51 billion Pennsylvania Public School Employees' Retirement System, Harrisburg, to encourage them to reduce investment costs by moving away from higher-fee money managers, implement administrative efficiencies and increase savings opportunities. They argued that making these changes would save billions of dollars for taxpayers over the coming years and improve the state's pension systems.