Public Pension Management and Asset Investment Review Commission Holds First Hearing in Harrisburg

Expert testimony focuses on transparency and the examination of financial risks


Harrisburg, PA – State Representative Mike Tobash, Chair, and Pennsylvania Treasurer Joe Torsella, Vice-Chair, of the Public Pension Management and Asset Investment Review Commission (PPMAIRC) today convened an informational hearing in Harrisburg to examine the need for improvements in transparency around investment expenses and returns of Pennsylvania’s two statewide pension systems.


“I believe in Pennsylvania’s pension system, which is why I believe that the teachers, troopers and state workers who have given years of service to their communities and the Commonwealth deserve to know exactly how many of their dollars are being paid to investment managers and exactly what returns they are getting. More transparency is greatly needed so that we can strengthen these systems on a foundation of openness and accountability."


Pennsylvania Treasurer, Joe Torsella

The Commission heard testimony from Dr. Ludovic Phalippou, Assistant Professor of Finance, University of Oxford on ‘The Importance of Transparency in Lowering Costs and Aligning Interests.” Dr. Phalippou is the author of ‘Private Equity Laid Bare,’ and specializes in areas of private equity to include fee tracking, interest alignment, and return benchmarking. His research has found that private equity firms charge billions in hidden fees and costs, beyond what is reported to the public or in some cases known by pension trustees.


The Commission was established in 2017 under the broader pension reforms of Act 5 of 2017 to conduct a comprehensive review of PSERS and SERS investment management. As part of its evaluation, the Commission will:


  • Recommend improvements to SERS and PSERS stress testing and fee reporting transparency;
  • Analyze SERS and PSERS assets, investment strategies, investment performance, fees, costs, and procedures against established benchmarks; and
  • Develop a plan to identify $1.5 billion in cost savings over 30 years for each of the two systems.

The Commission has six months to complete its review of PSERS and SERS, and to report findings and recommendations to the Governor and the General Assembly.


In addition to Representative Tobash and Treasurer Torsella serving as members to the Commission, James Bloom, Michael Torbert and Bernie Gallagher have also been appointed to the Commission.


Today, Commission members also heard from experts from the Institutional Limited Partners Association, the Rhode Island Treasury, and Leodoran Financial on the topic of transparency. Renee Astphan, senior investment officer at the Rhode Island Treasury, highlighted the state’s initiative to report all fees across all asset classes, with public data for 85 percent of managers. The second part of the hearing focused on stress testing, an exercise in evaluating financial risks to the pension systems under various conditions. Experts from The Pew Charitable Trusts, Society of Actuaries Blue Ribbon Panel, Cheiron, Gabriel Roeder Smith & Co., Carnegie Mellon University, and Massachusetts Institute of Technology provided testimony.


The Commission will hold two additional hearings which will center on an analysis of the pension plans across a variety of areas including asset allocation, fees and costs, performance and processes.


Editor’s Note: High-definition photos can be downloaded and used for publication by following this link.

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