PSERS Recertification Triggers Contribution Increase

Thousands of Pennsylvania teachers will have to pay more in contributions starting in July.


Thousands of Pennsylvania teachers will have to pay more in contribution rates beginning in July after the board of the $62 billion Pennsylvania Public School Employees’ Retirement System (PSERS) voted Monday to recertify the employee contribution rates it originally approved at its December meeting.

At that December meeting, the board’s general investment consultant and another firm said the retirement system’s nine-year performance figure was 6.38%, which was just above the 6.36% threshold that, under state law, triggers additional contributions.

However, during a meeting in March, management informed the board of errors in the data used to perform the calculation that were found by its investment consultant. As a result, the board ordered a review of all performance data to identify any additional errors.

When that was complete, the board’s consultant and the firm engaged for the review told the board that the actual nine-year performance figure was 6.34%, which would mean an automatic increase in contributions. The state’s “risk sharing” law means school employees, as well as taxpayers, have to contribute more when the pension’s investment portfolio underperforms.

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“The board regrets the uncertainty and confusion caused by these errors,” PSERS said in a statement, adding that it “will begin work immediately to notify state school employees and school employers.”

Contribution rates were raised for several classes of employees, which are based on when they began employment and what benefit elections they selected. Contribution rates for T-E class members were increased to 8% from 7.3%; T-F class members’ contribution has been moved up to 10.8% from 10.3%; T-G members’ contribution rate is now 9%, up from 8.25%; and T-H members’ contribution rate will increase to 8.25% from 7.5%.

The board also voted Monday for an “emergency procurement” of an investment consulting firm to provide monitoring and oversight of investment activities during pending internal and external investigations.

It also decided to hire a new law firm to represent and advise it on a federal investigation. Earlier this month, PSERS said it was served with a grand jury subpoena by the US Attorney’s Office of the Eastern District of Pennsylvania for documents and that is cooperating fully.

“To protect the interests of its members, outside counsel has been hired by the board of trustees to not only respond to the document subpoena but conduct an investigation into the calculation of the shared risk rate and the basis for the subpoena,” PSERS said in a statement at the time. It added that it “is confident that if any issues are identified that require correction, they will be resolved, and appropriate action will be taken.”

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CalPERS Sues Former Employee for Allegedly Stealing Pension Money

More than $685,000 was stolen from 10 retirees, including a homeless person and beneficiaries under legal conservatorships, the fund said in its lawsuit.


The California Public Employees’ Retirement System (CalPERS) is suing a former employee who allegedly stole about $685,000 from 10 retiree accounts, the fund said. 

Among the victims targeted by the accused former employee was a homeless person, as well as three beneficiaries who are under legal conservatorships, according to a complaint filed last week with the Superior Court of the State of California in Sacramento County. 

Members under conservatorships have legal guardians appointed to oversee their financial assets either because of old age or disability. 

CalPERS is aiming to recover the stolen assets from Gloria Najera, a former associate governmental program analyst who had been with the nation’s largest state retirement system for 25 years. As part of her job of administering retiree benefits, Najera had access to member addresses and direct deposit information for retirees in the CalPERS system, according to the lawsuit. 

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From July 2017 to this past January, the former employee allegedly used the information to breach dormant retiree accounts and redirect funds to her own bank account. The lawsuit said she used the money to pay off her and her family’s debts. 

“That this could have happened in the first place is unacceptable,” CalPERS said in a statement. “The employee’s actions were an abuse of access, breach of fiduciary responsibility, and betrayal of co-workers and all dedicated public employees.”

CalPERS said it will restore funds for the affected retirees and will seek to use its civil suit to recover the stolen assets. The pension fund will also perform a forensic audit.  

“CalPERS will exhaust every legal opportunity to recover the money stolen from the victims,” the fund said. 

Najera has been terminated from the fund, CalPERS said. She could not immediately be reached for comment.

CalPERS declined to comment further on the suit.

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