Senior school employee pension system investment manager to retire: report
After a year of miscalculations, investigations and growing board oversight, a key official in the state’s pension plan for school teachers is stepping down.
According to a report in the Wall Street Journal, Jim Grossman, director of investments for the public school employee pension system, will today tender his resignation for retirement purposes to the PSERS board of directors.
Grossman, 54, and CIO of PSERS since 2013, is the highest-paid employee in the state government, earning $ 485,421 per year according to the state salary database.
But its aggressive investment strategies have been increasingly questioned by the board of directors in recent years as the fund has failed to meet its long-term goals of investment gains in the face of rising investment returns. liabilities triggered by a set of lucrative benefit extensions approved by the state legislature. then-Govt. Tom Ridge in 2001.
In addition, he has also been at the center of ongoing federal and internal investigations into issues including the certification of a key rate of return error that late last year caused the board to forget about it. administration that he was going to have to start deducting more money from the paychecks of active teachers as part of a “shared risk” policy.
The rate of return error was discovered and corrected this spring.
It’s unclear exactly what federal investigations have revealed to date. But during a closed-door discussion of an internal investigation earlier this month, another lawyer hired to lead the review said his investigation did not uncover any wrongdoing.
Matt Haverstick of Kleinbard LLC, an attorney for Grossman, confirmed his client’s plan to step down to the Journal, which reported the news this morning.
In June, six directors requested the ouster of Mr Grossman and Glen Grell, the executive director, in a letter saying the system had paid excessive fees to Wall Street managers on alternative investments such as private equity. and hedge funds. The board never voted on the request, although it later withdrew its private equity commitments.
In a final triumphant moment for Grossman, however, the fund reported a net investment gain of $ 14.8 billion in the year ending June 30, 2021. These gains helped push up the Total system net assets of $ 13.5 billion to a record high. of $ 72.5 billion, according to audited financial statements released in October.
The net benefits of the investments, in turn, reduced its net pension liability from over $ 8 billion to about $ 41 billion as of June 30, 2021. It is important to note that there is no threatens that pension payments owed to retirees will not be paid; but as the unfunded liability grows, it falls to state government and local school districts to keep it solvent, consuming scarce tax resources that could be used in other areas.
The PSERS board is due to meet in extraordinary session this morning.