Philadelphia Inquirer: PSERS's pension strategy questioned

Submitted by Bob Buerkle

April 23, 2021

For the past decade Dean Dennis and I, as well as others, have been recommending that STRS should invest 70-75% of their portfolios mainly in stock, like they used to. In the first two paragraphs of this article about the Pennsylvania SERS Pension Plan there is commentary that a similar outcome would have resulted for them if they had done this instead of investing in high-cost Private Equity and Alternative Investments. The link to the entire article is included below.                                                                                                                                                                                  Bob Buerkle

From the Philadelphia Inquirer:

PSERS’s pension reversal has former allies questioning its strategy

by Joseph N. DiStefano

Published Apr 22, 2021

On Monday, when the state’s largest pension fund voted to charge school employees more for their retirement, the fund was compelled to do so because it had missed its 10-year investment goal by the narrowest of margins: two 100ths of a point.

Had the fund invested more in stocks as it used to, it would have made up its shortfall and prevented the extra charges, records show. Instead, the $64 billion fund invested in high-cost private equity and alternative investments that drove down PSERS’s performance numbers, triggering a need to require more contributions from recently hired school employees.

Read the rest of the article here.