Pennsylvania Public School Employees' Retirement System, Harrisburg, announced it is investigating what role, if any, its staff and investment consultant Aon might have played in miscalculating its investment performance figures.
So far, PennPSERS has not yet taken any personnel action during its investigation. In addition, the pension fund's board and staff "have always, and will continue to, fully cooperate with both the board's internal investigation and with any governmental inquiries," said Evelyn Williams, a spokeswoman for the $64.2 billion pension fund, in a statement issued March 26.
PennPSERS had announced Dec. 3 that it had increased its annual employer contribution rate to 34.94% for the fiscal year ended June 30, 2022, up from the current rate of 34.51%.
This increase in its contribution rate followed the board accepting results of an actuarial valuation report prepared by Buck Consultants, which reported a net return of 1.11% for the fiscal year ended June 30, and a net annualized return of 6.38% for the nine years ended June 30, as calculated by Aon.
But on March 12, PennPSERS announced that the board was notified that the figures used for certifying this rate increase contained a calculation error and had instructed the audit committee to investigate.
The board on March 19 selected law firms Womble Bond Dickinson to conduct a special investigation over the reported error and Morgan Lewis to serve as special counsel to assist the board in assessing any federal tax qualification issues involved with the shared risk calculation and to advise on how to recertify the member shared risk contribution rate.
A spokeswoman for Aon said the firm does not comment on client matters.