Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Consultants
    • Courts
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • SECURE 2.0
    • Special Reports
    • Washington
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • 2023 ESG Investing Conference
    • ESG Rated ETFs
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • Trends in DC: Focus on Retirement Income
    • 2023 Defined Contribution East Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
    • 2023 Canadian Pension Risk Strategies
    • 2023 Retirement Income
Breadcrumb
  1. Home
  2. INVESTING & PORTFOLIO STRATEGIES
April 26, 2017 01:00 AM

Pennsylvania governor, treasurer call on state pension plans to cut costs

James Comtois
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Pennsylvania Gov. Tom Wolf and state Treasurer Joe Torsella want the state pension plans to reduce investment costs by moving more toward passive investing.

    “Passive investment can yield similar or even better returns than Wall Street money managers and reducing these fees could save billions for the funds and taxpayers over the long term,” Mr. Wolf said at a press conference Monday. “I applaud Treasurer Torsella for his cooperation and leadership on reducing money manager fees and our hope is that the pension funds can proactively do the same.”

    Earlier this month, Mr. Torsella announced plans to shift all of the state treasury's $2.4 billion public equity investment holdings to a passive investment strategy, saying that the move will reduce investment risk and eliminate high management fees paid to outside firms.

    On April 13, Messrs. Wolf and Torsella announced that they had written to the boards of the $26 billion Pennsylvania State Employees’ Retirement System and the $51 billion Pennsylvania Public School Employees’ Retirement System 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 tax payers over the coming years and improve the state’s pension systems.

    “Every dollar that we save in Wall Street fees is a dollar we can keep in the pockets of Pennsylvanians,” said Mr. Torsella.

    In the letters, Messrs. Wolf and Torsella asked the boards of both PSERS and PennPSERS to work toward three goals: reduce Wall Street fees to the national average of public pension plans; reduce administration costs through the consolidation of pension investment and support operations; and expand the deferred compensation program. .

    “The responsible reduction of external manager fees has been, and continues to be, a priority of the board and staff,” said PennPSERS spokeswoman Evelyn Williams in an email, which noted that the pension fund’s investment expenses have been cut by 25% over the past three years.

    Ms. Williams added that the board has received the letter and the executive staff will discuss the letter with board members at an upcoming board meeting.

    PennPSERS also passively invests all its $3.6 billion in public U.S. equity investments using its own internal investment staff.

    PSERS spokeswoman Pamela Hile said that since 2010 the pension plan has reduced management fees by $73 million, allocated nearly 40% of the portfolio into passive investments and will continue that shift “where and when appropriate.”

    “We continue to work with the administration and PSERS to identify efficiencies to maximize value to our members and the taxpayers,” Ms. Hile added. “As a board member, the treasurer will have an opportunity to discuss these recommendations with the full board.”

    J.J. Abbott, spokesman for the governor’s office, and Debra Tingley, spokeswoman for the treasurer’s office, could not be immediately reached for comment by press time.

    Related Articles
    State contests focus on fees, amendments and promises
    New treasurers elected in 3 states; amendments approved that affect pension fun…
    Pennsylvania governor signs pension reform bill
    PennSERS commits $250 million to 3 private equity funds
    Recommended for You
    More funds testing water on crypto-related assets
    More funds testing water on crypto-related assets
    Money managers eager to make leap to opportunity zone investing
    Money managers eager to make leap to opportunity zone investing
    Index investing: Not as passive as you might think
    Index investing: Not as passive as you might think
    OCIO: Steady Hand at the Wheel
    Sponsored Content: OCIO: Steady Hand at the Wheel

    Reader Poll

    May 1, 2023
     
    SEE MORE POLLS >
    Sponsored
    White Papers
    Middle market credit: We’re gonna need a bigger boat
    Alternative Credit: Differences and Opportunities in CLOs and Credit Risk Shari…
    Fixed Income is Attractive, but Beware of "Fake" Yield
    Counting on a Crisis: A Catalyst for Investment Innovation?
    A Strategic Allocator's Guide to Productivity and Profits
    Research for Institutional Money Management
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Consultants
      • Courts
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • SECURE 2.0
      • Special Reports
      • Washington
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • 2023 ESG Investing Conference
      • ESG Rated ETFs
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • Trends in DC: Focus on Retirement Income
      • 2023 Defined Contribution East Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars
      • 2023 Canadian Pension Risk Strategies
      • 2023 Retirement Income