Pennsylvania’s General Auditor Eugene DePasquale said on Monday he plans to conduct audits of the state’s two major public pension systems.
The audit will probe into the funds’ use of outside investment managers and the fees paid to those managers.
DePasquale said it is timely now to do an independent stress test of the systems, their investment strategies, and the use of external, third-party managers to try to maximize returns.
“I have ordered this audit because we want to do everything we can to try to help with this situation,” DePasquale said Monday, noting neither fund has met its investment targets for the last year and both have significant unfunded liabilities.
“The main thing we want to answer is, are there ways they can do things better that actually saves them a lot of money, so they can put that money back into the (respective) systems,” the auditor general said.
DePasquale added that he’s not pre-judging the funds’ performance, but “obviously they’re not meeting their targets and that’s creating huge financial problems for the state.”
DePasquale said he also will examine pension forfeitures, both to make sure that law is being applied correctly, and whether Pennsylvania’s current statute should be strengthened to promote better behavior among public officials.