ROCKVILLE, MD (August 14, 2018) — Citing the Maryland Public Policy Institute’s groundbreaking research on public pension investment fees, Pennsylvania Governor Tom Wolf and Treasurer Joe Torsella are urging their state’s two public pension systems to reduce exorbitant fees paid to Wall Street management firms and instead increase savings for Pennsylvania taxpayers.

“The evidence is clear that passive investment can yield similar or even better returns than Wall Street money managers and reducing these fees could save billions for the funds and taxpayers over the long-term,” Governor Wolf said in a press release citing the Institute’s research.

The Institute in May released a report analyzing pension investment performance and fees across 33 states with similar fiscal years. The report found that the Pennsylvania State Employees Retirement System and the Pennsylvania State Employees’ Retirement System pay a significantly higher expense ratio than their peers nationwide. Pennsylvania’s two public pension systems pay an estimated $167 million annually to Wall Street money managers.

The Institute’s full report can be viewed at mdpolicy.org. Jeffrey C. Hooke and Carol Park lead the Institute’s public pension research.  

“Governor Wolf and Treasurer Torsella deserve credit for putting public employees and taxpayers ahead of Wall Street,” said Christopher B. Summers, president and chief executive officer of the Institute. “We look forward to the day when the Maryland State Retirement & Pension System board demonstrates similar leadership.”

Maryland faces its own pension investment challenges. According to the Institute’s report, Maryland pension managers lost out on nearly $9 billion in income over the past decade by paying higher-than-average investment fees to Wall Street managers in exchange for lower-than-average investment returns.

About the Maryland Public Policy Institute: Founded in 2001, the Maryland Public Policy Institute is a nonpartisan public policy research and education organization that focuses on state policy issues. The Institute’s mission is to formulate and promote public policies at all levels of government based on principles of free enterprise, limited government, and civil society. Learn more at mdpolicy.org.