PA PSERS Board of Trustees Holds Public Meetings

HARRISBURG – At its public meetings this week, the Board of Trustees of the Pennsylvania Public School Employees' Retirement System (PSERS) approved proposed fiscal year 2023-24 budget requests and four private markets investments. The Board also learned more about the System's top-tier preliminary fiscal year (FY) 2022 investment performance, and was notified that the System's voluntary prescription drug plan for retirees earned a high consumer-satisfaction rating from the federal government.

 

On Friday, the Board adopted proposed 2023-24 budget requests totaling $104 million, covering the System's administrative, investment, defined contribution and health operations. PSERS budget costs historically have been lower than its public pension peers, according to surveys by CEM Benchmarking Inc.

 

The Board-approved investments were:

• $175 million in Cabot Industrial Value Fund VII, private real estate
• $125 million in DRA Growth and Income Fund, private real estate
• $125 million in Incline Equity Partners VI, private equity
• $20 million in Insight Vision Capital II, private equity.

At Friday's Investment Committee meeting, PSERS' consultant, Aon, provided trustees with an update on PSERS Interim Chief Investment Officer Bob Devine's recent report on the System's 2.28% preliminary net performance return for the fiscal year ended June 30, 2022.

 

PSERS was one of a small number of U.S. public or corporate pension plans that generated positive net investment performance through the turbulent market environment, Aon Partner Claire Shaughnessy told the committee. PSERS' positive showing mainly was caused by the Board utilizing an "efficient" diversified investment portfolio that was not over reliant on any one asset class or set of asset classes, Shaughnessy said.

 

In other Board business this week, Peter Camacci, PSERS Director of the Health Insurance Office, announced that PSERS Health Options Program (HOP) Employer Group Waiver Plan received a 4.5 Star Rating for the upcoming 2023 plan year. By comparison, the Centers for Medicare and Medicaid Serves (CMS) average rating for prescription drug plans was 3.25 Stars.

 

"Retirees thinking about joining HOP's prescription drug plan can look at this CMS rating and feel confident they will get a stellar product," Camacci said. "After all, the rating is based in part on how our existing customers rate the plan's services and care."

 

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PSERS, founded in 1917, began operations in 1919 to oversee a statewide defined benefit pension plan for public school employees. PSERS' role expanded upon the passage of Act 5 of 2017 to include oversight of two new benefit options consisting of defined benefit and defined contribution (DC) components and a stand-alone DC plan. As of June 30, 2022, PSERS had total net assets of $71.2 billion and a membership of about 248,000 active, 243,000 retired school employees and 26,000 vested inactive members.