*This story was updated at 5:35 p.m. on Thursday, 11/18/21 with comment from AFT.
Two of the top officials at Pennsylvania’s $66 billion teachers pension fund are stepping down next month, creating sudden openings to lead the troubled fund.
Both the executive director, Glen Grell, and the chief investment officer, Jim Grossman, will bow out of their formal positions in December, according to dual statements released by the Pennsylvania Public School Employees Retirement System on Thursday.
Grell and Grossman then will both transition to become senior advisors to the fund, aiding in the hand-off to their replacements. Grell will officially retire at the end of February; Grossman at the start of May. The search for their successors will begin immediately, the statements said.
Grell has served as executive director since 2015. Previously, he was a member of the Pennsylvania House who served on the fund’s board.
Grossman, the commonwealth’s highest paid employee, at $485,421, worked for PSERS for more than 24 years. He was promoted to chief investment officer in 2013.
The fund has been the center of controversy in the past year. First, the board approved a faulty performance benchmark that prevented an increase in educators’ retirement contributions.
The exact circumstances that led the board to approve the erroneous numbers are still unclear and under internal investigation.
But the pension fund has since revoked its approval, forcing almost 100,000 state educators hired since 2011 to pay an average of $180 dollars more a year into the system. The mistake is currently the subject of an internal investigation.
The FBI also is investigating the fund over land purchases made in Harrisburg, and the Securities and Exchange Commission is looking into potentially unlawful gifts or trips money managers may have given to pension staff.
These inquiries are on top of the fund’s overall tepid performance. The fund has bet heavily on alternative investments, such as real estate and private equity, in recent years, hoping to beat the market and overcompensate for years of underinvestment. However, those Wall Street firms often have underwhelmed.
One teachers union, the 36,000-strong Pennsylvania chapter of the American Federation of Teachers, had already called for Grell’s and Grossman’s resignation, as well as most of the pension’s governance board, earlier this year.
These overlapping investigations “jeopardized the present and future financial security of our Commonwealth’s most dedicated public servants,” the union said in its letter.
In a statement Thursday, Arthur Steinberg, President of AFT Pennsylvania said that the union was “encouraged that Grell and Grossman have finally read the room and made their way toward the exit.”
“This is a good first step in the right direction of a more transparent PSERS, but it’s by no means a panacea,” Steinberg added. “With federal investigations looming, those responsible for any wrongdoing should be held to account, regardless of their employment status with the fund.”
He echoed a call from Gov. Tom Wolf for PSERS to make public all investigation results, and added that there should “not be golden parachutes provided for those who have cost Pennsylvania’s educators more out of their hard-earned checks.”
A spokesperson for the Pennsylvania State Education Association, the state’s largest teachers union and a supporter of PSERS, declined to comment.
The fund is on the hook to pay for the current and future pensions of more than 500,000 active and retired Pennsylvania school teachers, staff, and administrators.
Our stories may be republished online or in print under Creative Commons license CC BY-NC-ND 4.0. We ask that you edit only for style or to shorten, provide proper attribution and link to our web site. Please see our republishing guidelines for use of photos and graphics.