Jan. 21—"We are more unified than people give us credit for," Chris Santa Maria, who chairs the giant Pennsylvania Public School Employees Retirement System (PSERS), hopefully told his board at the start of its annual reorganization meeting Friday, with two years of investigations, investment disputes and high-level resignations and replacements behind them.Or maybe not so unified, after all.Santa Maria, a high school government and economics teacher and former union president in Lower Merion, was reelected without opposition as chair of the 15-seat board, with power to set the $66 billion plan's policy and investment agenda.But his attempt to install a fellow union leader in the state's largest school workers' union as his vice chair and likely successor fell short, as members from both political parties on the board declined to support the move while three seats remain vacant.AdvertisementSue Lemmo, a retired art teacher and union officer from Curwensville, Pa., was nominated as Santa Maria's vice chair. But several of her fellow trustees objected.
The former vice chairman, Rep. Francis X. Ryan (R., Lebanon), retired.Santa Maria and Lemmo are among five members of the influential Pennsylvania State Education Association who serve as trustees on the unpaid board.
Tapping another teacher to chair the board, while two trustees are still to be appointed by Gov. Josh Shapiro and one by Senate Republicans, "is inviting heightened scrutiny and potential legislative reforms of the PSERS board," warned Kevin Busher, representing the Pennsylvania School Boards Association on the pension board.State Treasurer Stacy Garrity said she preferred to wait until the new secretaries of Banking and Education, as well as the Senate representative, were seated.The school boards' rep, as well as the treasurer, and their allies, have sometimes split against teachers' union leaders and their supporters in board discussions over investments, leadership and public disclosure in the past.The union members generally supported PSERS' policy of avoiding U.S. stocks since the market fell in 2008 and instead buying high-fee private investments — a policy that had the effect of shutting PSERS out of the bull market gains during the Trump and Obama years, according to their critics.
Last year the factions agreed to slowly sell its hedge funds and buy more stocks, among other changes.The system faces a long-term gap of more than $40 billion between assets and pension liabilities, which management blames on state government for failing to fund the pensions more completely between 2001 and 2011, while critics also blame it on underperforming investments. The system is funded by more than $5 billion in annual state and local government payments, around $1 billion from teachers, and varying amounts from investment gains.After reporting exaggerated investment returns for 2011-20, PSERS was investigated by a federal grand jury, attracted a probe by the Securities and Exchange Commission and conducted its own internal investigation. The criminal investigation ended without charges.At Friday's meeting, board members including State Rep.
Torren Ecker (R., Adams); former state treasurer Joseph Torsella, trustee rep for Gov. Tom Wolf; and others also declined to support Lemmo until the new members were on board.Board members agreed to name Lemmo interim vice chair until the vacant seats are filled. Lemmo could still be elected at that time or a new candidate.Santa Maria confirmed the potential significance of the vote when he announced later in the meeting that he is retiring as a teacher in June.
He clarified later in an email, however, that he can, under PSERS rules, remain as chairman until his term expires in December. (The earlier version of this story said he would leave before the end of his term, whose length was misstated in an earlier statement by PSERS.)Shapiro's proposed appointments, who will automatically serve as PSERS trustees when they are confirmed in office, include his choice for state banking secretary, Wharton scholar and ex-Wall Street executive Susan Hammer, and Education secretary, Khalid Mumin, a former superintendent of Lower Merion and of Reading.(c)2023 The Philadelphia InquirerVisit The Philadelphia Inquirer at www.inquirer.comDistributed by Tribune Content Agency, LLC. Success! An email has been sent with a link to confirm list signup.
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