4/19/2021 - Updated Statement from PSERS Board of Trustees
This evening, the Pennsylvania School Employees' Retirement System Board voted to recertify the employee contribution rates originally approved by the Board at its December 3, 2020 meeting. At that meeting, the Board received information from both its general investment consultant and an additional firm confirming that the nine-year performance figure was 6.38% - slightly above the 6.36% threshold for triggering additional contributions under the shared risk provisions of Act 120 of 2010 and Act 5 of 2017.
At its March 5, 2021 meeting, management apprised the Board of errors identified by its investment consultant in the data used to perform that calculation. The Board subsequently ordered a total review of all performance data to identify any additional errors. Upon completion, the Board's consultant and the firm engaged for the review informed the Board that the actual nine-year performance figure was 6.34%. This downward revision of 0.04% placed performance below the 6.36% threshold for risk sharing.
Mindful of its duty to faithfully execute the relevant provisions statute, the Board decided tonight to amend its December 2020 decision, certifying the actual nine-year performance figure of 6.34%. Based upon the statutory requirement of Act 120 and Act 5, this recertification will require additional employee contributions beginning in July 2021.
The Board regrets the uncertainty and confusion caused by these errors. PSERS will begin work immediately to notify school employees and school employers around the Commonwealth. The Board has engaged outside counsel to perform an independent internal investigation to determine how this error occurred and ensure that similar errors do not occur in the future.