Pennsylvania State Employees Retirement System and the Pennsylvania Public School Employees Retirement System, both in Harrisburg, today filed preliminary objections to a lawsuit filed by Robert P. Casey Jr., Pennsylvania auditor general. The filing in state court stated that Mr. Casey has "significant disabling conflicts of interest that would make it impossible for him to objectively review the performance of the funds investment managers.
Mr. Casey last month sued the $38.3 billion school retirement system and the $21.3 billion PennSERS to force the plans to be audited by the auditor generals office, which the plans would have to pay for. The audit would focus, in particular, on the outside investment managers.
Fund officials say: Mr. Casey has no legal authority to conduct an audit without their permission; he is forcing the plans trustees to give him a "blank check to cover the audits cost; and he has significant conflicts of interest because he has accepted hundreds of thousands of dollars in campaign contributions from some of the funds investment managers.