New policy follows best practices from other funds, requires disclosure of travel
Harrisburg, PA - Pennsylvania State Treasurer Joe Torsella today released the following statement, following the unanimous adoption of a travel disclosure policy by the Pennsylvania School Employees Retirement System (PSERS) Board of Trustees:
“Friday’s vote at PSERS is a remarkable first step in the right direction for the system, and shows real leadership by the PSERS board. No public fund should tolerate the practice of having Wall Street vendors act as travel agents for employees or fiduciaries of a public fund and booking trips around the world on their behalf. While I do not believe that any PSERS staff acted in bad faith or failed to follow the rules that have been in place until now, it is time to change those rules. These trips present tremendous potential for conflicts of interest. As fiduciaries, it’s our job as board members to avoid both the actual and appearance of those conflicts. I commend the Board and its leadership for rising to this issue and implementing a commonsense policy to significantly increase transparency to the public, and will work diligently to see that it is fully implemented.”
Pennsylvania State Treasurer, Joe Torsella
The new policy requires that all travel-related expenses incurred by Trustees and investment office staff be disclosed publicly on a quarterly basis, moving forward. It also requires that all travel arrangements and expenses are made and paid for by PSERS, rather than third party investment managers, consultants, or vendors. As part of the policy, PSERS is required to report details of all travel taken since January 1, 2017.
In December of 2019, the Pennsylvania Capital-Star reported a lack of transparency regarding trips taken by staff to Beverly Hills, CA, in connection with a private equity firm called Platinum Equity. This report sparked a request by the Board’s audit committee for a report on travel expenses for the system, which remains incomplete. Friday’s vote at the PSERS Board ensures future travel is accounted for and reported publicly.
In 2018, the Public Pension Management and Asset Investment Reform Commission, established by Act 5 of 2017, recommended a travel disclosure policy in the interest of fee and cost transparency. Treasurer Torsella served as Vice Chair of this commission, alongside Chairman Mike Tobash.