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Senate Co-Sponsorship Memoranda
Senate of Pennsylvania
Session of 2023 - 2024
Regular Session
MEMORANDUM
| Posted: | January 11, 2023 06:17 PM |
|---|---|
| From: | Senator Katie J. Muth |
| To: | All Senate members |
| Subject: | Full Disclosure of Investment Managers and Investments in Pennsylvania Public Pension Plans for Annuitants and Enrollees |
| In the near future, I will be introducing legislation that would ensure transparency regarding our state’s public pension systems investments by providing access to annuitants and enrollees of the identity of the systems’ investment managers and investment contracts. Nationally, more than $1.4 trillion has been funneled from public pension funds into alternative investments, like private equity, hedge funds, and real estate. Assuming the industry standard fee model, this payout generates at least $40 billion annually for one of the wealthiest industries in the world. Since 2021, the Pennsylvania Public School Employees' Retirement System (PSERS) has paid out more than $1.7 billion to Wall Street money managers. These firms and alternative investments lack the transparency of publicly traded companies. For example, in 2016, the Rhode Island Teachers Association reported to the SEC and FBI that some of the financial firms managing their state’s pension money claimed they could offer different fee rates, inside information, and cash-out rights to some investors but not others. My legislation seeks to increase transparency around these investment agreements and contracts. Under this bill, upon request by an annuitant or enrollee of one of the Commonwealth’s public pension systems, the system would be required to disclose to the requestor any investment manager or investment contract. Our state’s retired and active public employees should have the ability to see where their hard-earned money is being invested and under what terms. Historically, nearly all contracts with alternative investment management firms were public records, but intense lobbying by Wall Street changed that by urging state legislatures across the country to pass laws to limit disclosure in the early 2000s. Cosponsor this legislation to enhance transparency and fully inform Pennsylvania’s retired and active public employees of their pension systems’ investments. |
Memo Updated: January 11, 2023 06:18 PM