The Pennsylvania Public School Employees’ Retirement System is suing Aon Investments USA over accounting errors it made in a 2020 risk share analysis, alleging the firm hurt the pension fund’s reputation and caused millions of dollars in damages.
The lawsuit, which accuses Aon of breach of contract, breach of fiduciary duty and negligence, stems from a calculation error the firm made that caused PSERS to inaccurately report its returns in December 2020. The civil suit was filed July 31 in Pennsylvania’s Court of Common Pleas for Philadelphia County.
Aon initially reported that the pension fund’s nine-year performance figure was 6.38%, just above a 6.36% threshold that triggers additional contributions from participants. However, a correction later showed that the figure was in fact 6.36%, which forced the pension fund’s beneficiaries to increase their payments.
According to the complaint, Aon at first told the pension fund it had rechecked its data and there had been no error, then “dragged its feet for more than two-and-a-half months before finally admitting its error.” The complaint adds that “when Aon finally did admit the error, Aon claimed that one of its analysts had simply made an error in uploading data.”
The pension fund said in the complaint that the impact of the accounting error “was, and continues to be, substantial,” adding that because Aon’s errors were widely reported in the media, they hurt PSERS’ reputation and caused millions of dollars in losses.
“Aon has refused to adequately address or take full responsibility for its errors,” the complaint says. “It has failed to fully cooperate with multiple investigations into those errors and in a separate litigation arising from those errors. For these reasons, Plaintiffs’ damages have increased, are ongoing, and continue to mount.”
PSERS is seeking unspecified reimbursement for “millions of dollars” in costs and attorneys’ fees, which it claims it was forced to incur as a direct result of Aon’s conduct. PSERS has previously said that it paid Aon $7.2 million for investment advice over the course of almost a decade.
Aon declined to comment, citing pending litigation.
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Tags: accounting error, Aon Investments, complaint, Lawsuit, Litigation, Penn PSERS, Pennsylvania PSERS, Pennsylvania Public School Employees Retirement System, PSERS, risk share analysis