The United States Securities and Exchange Commission has joined a federal investigation into Pennsylvania’s largest pension fund and is looking, among other things, to determine whether inappropriate “compensation and gifts” may have been offered to staff, reported newspaper.
The Philadelphia Inquirer reports that the commission is also looking for documents previously sought by the U.S. Attorney’s Office on what officials of the $ 64 billion public school employee pension system called an error in calculating performance. long-term investment of the fund.
The newspaper reported that the summons given to the school pension scheme on Friday was the first indication that investigators were looking for possible gifts or money from investment advisers and consultants. Government employees are prohibited from accepting such gifts under a ban imposed by Governor Tom Wolf.
The Securities and Exchange Commission pursues civil rather than criminal complaints and has broad power to impose fines, discipline financial actors, and order changes. Pension fund system spokesman Steve Esack said on Saturday the fund had no comment on the SEC action, the newspaper said.
The board of directors of the pension fund voted almost unanimously in April to increase contribution rates after revealing in March what it called a consultant’s flawed calculation of long-term investment performance. fund term that helps determine the balance of payments in the system by taxpayers and school employees.
System officials confirmed in April that the agency had received a subpoena to appear before a grand jury for documents on the risk-sharing calculations. Federal investigators also requested information on purchases by the fund of plots of land in downtown Harrisburg.
The initial calculation – growth of 6.38% over the nine years ending June 30 – was slightly above a growth threshold of 6.36%, thus protecting school employees hired after 2011 from a rate higher risk-sharing contribution.
Following a review, the board said the consultant and a separate company told the board that the actual nine-year performance figure was 6.34%, triggering a legal risk-sharing provision that requires an increase in employee contribution rates.
The Pennsylvania branch of the American Federation of Teachers, representing more than 36,000 school workers in 64 local unions, called for the dismissal of executives and the resignation of board members who joined the board before this year. The union president said many members will see a pay cut ranging from $ 30 to $ 50 per month.