Pennsylvania Public School Employees' Retirement System board member and state senator Katie Muth has filed suit against the $64.2 billion state pension plan seeking documents and information disclosing how PennPSERS is managed and selects its investments.
Ms. Muth, a Democrat, said in a news release issued Tuesday that her office has been repeatedly denied access to such documents.
"I have time and time again been denied access to documents and information regarding (PennPSERS) investments, practices, and management," said Ms. Muth in the release. "While at first this was just frustrating, once news that the Department of Justice was investigating PSERS, it became incredibly concerning."
On April 8, PennPSERS confirmed that a federal investigation had been launched into the state pension plan after the board had discovered an error in its reported investment figures.
Ms. Muth, who has been a member of PennPSERS' board since February, added that she felt she "needed to take this step to guarantee transparency and security to the fund" when she "was informed that the board is expected to vote on" more than $1 billion "of alternative investments on June 10."
Ms. Muth said she hopes her complaint, filed Monday in Commonwealth Court in Pennsylvania, will compel PennPSERS to provide board members the information before its June 10 meeting, adding that she found it "absurd to expect board members to vote on over a billion dollars of public money without access to all information."
In response, PennPSERS spokeswoman Evelyn Williams said in a statement: “We are aware of and disappointed by Senator Muth’s unnecessary action in filing her meritless lawsuit, and we look forward to promptly responding in convincing and dispositive fashion in order that we may continue our cooperation with the Department of Justice, and also ensure the completion of the current independent internal investigation. This lawsuit diverts valuable time, energy, and resources from what we believe is in the best interests of the beneficiaries, which should be the primary directive as we respond to the investigations.”
In December, PennPSERS reported a net annualized return of 6.38% for the nine years ended June 30, slightly above the 6.36% threshold for triggering additional contributions. The board discovered the error and announced a special internal investigation was being conducted in March.
The board later voted to certify that the plan's actual nine-year performance was 6.34%, below the threshold and therefore triggering additional employee contributions beginning July 1.
