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Gov. Josh Shapiro has tapped four Philadelphia-area men to replace outgoing trustees on the unpaid boards that oversee Pennsylvania’s century-old public pension plans. The plans invest more than $100 billion to help pay retirees and require more than $8 billion a year in public funding.
For the $35 billion SERS Retirement System, which funds the retirement checks of 250,000 active and retired state troops, state college staff, elected officials and other public servants, the Democratic governor asked the State Senate to confirm:
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Wendell Young IV, president of UFCW Local 1776, which represents 35,000 employees of chain grocery stores, drugstores and food factories, including 3,500 employees of state-owned liquor stores in Pennsylvania, and sits on several union pension boards;
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Uri Monson, Shapiro’s budget secretary, who also served as Shapiro’s chief financial officer when Shapiro led Montgomery County government and the county fired its private investment managers to replace them with low-fee funds, mostly from the group Vanguard based in Malvern;
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Bob Mensch, a former Republican state senator who represented parts of Berks, Chester, and Montgomery counties.
If approved as expected, the governor’s picks will replace SERS Chairman David R. Fillman, who is stepping down as head of AFSCME Council 13, representing 65,000 state workers; Glenn E. Becker, head of the investment committee of SERS, a professional investor who engaged in “questionable” conduct – but not wrongdoing – when he pressured pension staff to he meets politically advantaged investors, according to a 2017 survey; and Mary A. Soderberg, former Governor Ed Rendell’s budget secretary.
For the PSERS board, which invests $70 billion on behalf of half a million retired teachers and school staff, Shapiro wants the state Senate to approve Richard Vague, a former principal from the Chase Manhattan Bank credit card turned Philadelphia-based investor, philanthropist, and politician. donor as his personal representative.
Former state treasurer Joe Torsella, a pension reformer, stepped down last winter as former Gov. Wolf’s representative on the board.
The governor appoints six of the 11 directors of the SERS and three of the 15 members of the council of the PSERS.
Pennsylvania’s next bank secretary?
In addition to his recent nominees, Shapiro is already looking for a new nominee for bank secretary, who will serve on both pension boards.
Sarah Hammer, a Wall Street veteran turned University of Pennsylvania private equity specialist, was Shapiro’s previous choice for the bank, but dropped out of the confirmation process. People familiar with her candidacy say she returned to work at Penn’s Wharton School, where she ran an “alternative investments” program funded by Sixers owner Josh Harris, founder of Apollo Global, one of largest PSERS fund managers. (The governor’s choice for education secretary, Khalid Mumin, also gets a seat on the PSERS board.)
Neither Shapiro’s office nor Wharton has commented on why Hammer, who had already started attending retirement meetings, left his post at Harrisburg and retired. boards.
Shapiro vs. PSERS administrators
Shapiro said he would like to see Pennsylvania funds fire their “Wall Street” managers and lower their fees. But PSERS sources say they expect the board will not deviate much from its current policy, which calls for dumping hedge funds, cutting back but maintaining at least 12 % of plan in private equity investment and increased investment in infrastructure construction. funds. Shapiro’s three trustees will outnumber five teachers’ union members and five elected officials. (There are also two school board representatives.)
Vague, Shapiro’s nominee to represent him on the board, is an architect of the board’s current investment policy, including the slow phase-out of hedge funds and directly owned real estate.
Vague joined Torsella and State Treasurer Stacy Garrity in opposing former PSERS executives, who resigned amid federal and internal investigations, beginning last year, but he also cultivated close ties with the teachers of this council who had supported these executives.
Look forward
Other new faces on the PSERS board include GOP state Sen. Greg Rothman, who represents communities on the west bank of the Susquehanna above Harrisburg.
New PSERS directors face a series of thorny issues, including losses from aging private equity funds, unresolved questions from the internal investigation into its own exaggerated returns and new board leadership after board chairman Chris Santa Maria, a social studies teacher at Harriton High School, retires later this year. The SERS will also need a new chair.
This article has been updated to correct the name of Josh Harris’ investment firm.