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Pension systems’ costs are higher than reported, panel told

September 20, 2018

HARRISBURG, Pa. (AP) — Private equity costs paid by Pennsylvania’s two large public pension systems are getting more scrutiny.

Professor Ludovic Phalippou of the University of Oxford told a state panel seeking ways to lower those fees Thursday that he estimates the systems paid $6 billion over 10 years, including a profit-sharing expense called carried interest.

Phalippou says the systems reported paying $2.2 billion, but won’t divulge documents that would help him compute a more accurate number.

The Public School Employees’ Retirement System says it’s cooperating with requests for documents. Both it and the State Employees’ Retirement System say they are working to expand their reporting of what they pay to private equity managers.

The underfunded pension systems have been under fire by Gov. Tom Wolf and other state officials to reduce those fees.

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