Manager SelectionDecember 6, 2022

PSERS Posts Ad for New CIO

The $75 billion pension fund is looking for its first permanent CIO since Jim Grossman resigned last year.

Reported by Michael Katz

The Pennsylvania Public School Employees’ Retirement System has posted an ad on its website for a chief investment officer to oversee the public pension fund’s $75 billion portfolio. [Source]

According to the posting, the CIO will lead a team of approximately 70, reports to Executive Director Terrill Sanchez and is accountable to the pension fund’s board of trustees. The job description calls for the CIO to act as a fiduciary with “an ethical and legal obligation to prudently and exclusively act on behalf of the interest of the system’s members.” The CIO is also expected to act as an investment policy consultant to the pension fund’s board, which has the final say over the investment program.

Some other duties of the CIO also include:

Overseeing the day-to-day activities of the investment department and developing and monitoring the investment budget.
Working with the board of trustees and investment consultants to develop asset allocation and implementation strategies.
Reporting on the strategic direction of the investment program.
Overseeing the internal investment program, which includes asset classes such as public and private equities, fixed income, real estate, commodities and infrastructure.
Recommending investment personnel changes and salary levels.

The job post also says that the CIO should be “a strategic and forward-thinking investment executive dedicated to public service” and “must be a leader who takes ownership of the investment program.”

PSERS mentions in the job posting that it has been under both internal and external investigations related to an incident in 2020, when an error by consultant Aon resulted in its board of trustees certifying inaccurate contribution rates for its members. The board was told by its general investment consultant and another firm that the retirement system’s nine-year performance figure was 6.38%, which was just high enough to avoid triggering additional contributions under state law. However, after correcting the Aon error, the nine-year return was corrected to 6.34%, which triggered an increase in contributions.

The job post also says that an internal investigation did not find evidence of criminal wrongdoing and that PSERS “has been cooperating fully with the ongoing federal investigations,” adding that, “the Department of Justice closed the probe of the investment calculation error with no criminal or civil charges being filed against the system.”

The incident led to the retirement of Jim Grossman, formerly the fund’s CIO, and Glen Grell, formerly its executive director, in November 2021. Robert Devine is currently PSERS’ interim CIO.