Pennsylvania Public School Employees' Retirement System and the Pennsylvania State Employees' Retirement System, both of Harrisburg, today signed an agreement with Auditor General Jack Wagner allowing state audits of the two funds' investment performance, said Evelyn Tatkovski, spokeswoman for the $52 billion school employees' fund, and Robert Gentzel, spokesman for the $26.6 billion state employees' fund. The agreement settles litigation that was pending between the two retirement systems and the state Supreme Court.
The auditor general's office and the two funds also signed a contract with Independent Fiduciary Services today, said Steve Halvonik, spokesman for the auditor general's office. IFS will conduct a fiduciary review of operations at each fund and will assist with the audits. The audits and IFS' fiduciary review are set to begin immediately; there is no timetable on completion.
The audits will examine the funds' selection and monitoring of investment managers, advisers and consultants, as well as organizational structures and resources. They will also look at the funds' efforts to recover money lost in corporate scandals.
As part of the agreement, the two pension funds will withdraw their appeal of an October 2004 state court ruling recognizing the auditor general's authority to conduct performance audits.