The Pennsylvania Public School Employees’ Retirement System (PSERS) says Alan Van Noord plans to retire as chief investment officer in June, as Gov. Tom Corbett presses to reduce the state's relatively generous retirement guarantees for more than 200,000 retirees and around 275,000 current school employees.
Van Noord, who earned $296,000 last year, a fraction of what private-sector fund bosses collect, steps down as PSERS and the smaller SERS state employees' retirement fund face deficits between the assets they have saved from investments, taxpayers and employee payroll deductions and their future obligations to pay the relatively generous benefits guaranteed by past governors and the General Assembly.
The move also comes as PSERS is preparing its yearly "budget book" to submit to legislators.
Legislators have struggled to reduce PSERS deficit growth by forcing increases in school district property tax contributions and paying more in state General Fund subsidies. Gov. Corbett says he wants to limit future retirement, and put future retirees on worker-directed 401-k type plans instead of guaranteed pensions, as a way of keeping future deficits from growing.
Van Noord's deputy, James H. Grossman, Jr., will serve as acting CIO from July 1. In his statement, Van Noord said he and his staff and board of political and labor appointees took credit for building what he called "a well-diversified investment structure and significantly reduced investment risk" that is now "better able to withstand any difficult economic times in coming years.” He added that he and his wife plan to travel in retirement.
As at SERS, PSERS under Van Noord spent hundreds of millions of dollars a year hiring a variety of private money managers whose collective returns often failed to meet the fund's targets. His supporters on the board blamed national investment conditions. In 2008, a national association of state pension fund investment officers gave Van Noord the Richard Stoddard award "for service to the public pension fund industry."