Pennsylvania Pension Fund Chairman Resigns

(January 2, 2014) — The chairman of the Pennsylvania State Employees’ Retirement Board (SERS) has submitted a letter of resignation to Governor Tom Corbett.

“Please be advised that I will relinquish the chairmanship of the State Employee’s Retirement board on the close of business on Friday, January 3, 2014, and will resign my seat on the SERS board at the conclusion of the regularly scheduled SERS board meeting on January 22, 2014,” Nicholas Maiale wrote in the letter, a copy of which was obtained by aiCIO.

The resignation follows the ongoing scandal at the $27 billion fund. Former CIO Tony Clark has been accused of using SERS information and resources for personal trades and of withholding investment data from the board. Clark has also resigned.

According to confidential legal documents also obtained by aiCIO, Clark was not alone in possible inappropriate behavior. The records alleged that Maiale secured “political deals” for himself that may not have been suitable for the fund, and instructed Clark to “push whatever investment Maiale wanted.”

The chairman’s actions were further put under scrutiny when Treasurer Rob McCord called upon Governor Corbett to replace Maiale to “improve SERS operations and business practices and restore the agency’s reputation.”

“These charges not only implicate SERS’ chief investment officer, but also explicitly include the chairman of the board and the process by which investment opportunities are identified and vetted, and also the veracity with which they are presented to the board for approval,” McCord wrote in a letter to the governor.

Maiale has served as SERS chairman since 1992, working under a total of five governors.

“I believe that the SERS board and staff has done an outstanding job serving the retirees, state employees, and taxpayers of Pennsylvania,” Maiale said. “Despite the underfunding, caused by a variety of factors, the fund is secure and able to meet its obligations in the years to come.”