Pennsylvania Treasurer Joe Torsella has revealed that a staggering $5.5 billion has been “wasted” on costly pension fund management fees.

A Financial Times article last week detailed how the money was spent by the state on high-priced Wall Street advisers over the past decade, to little effect, writes Ryan Briggs at cityandstatepa.com.

[uam_ad id=”54865″]

While the scale of the problem was larger than previously known – nearly five times higher than previous estimates – elected officials have long understood that the riskier investments and pricey fees paid to the funds’ investment managers were not paying dividends. Despite that knowledge, the 11-member board for the $29 billion State Employees Retirement System quietly approved another 10-year investment plan, developed by RVK Inc., that would continue to focus on the alternative investments that Torsella says has led to billions in waste.

In total, Pennsylvania has spent $6.8 billion on similar private equity schemes over the past 10 years. However, Torsella maintains that the state retirement funds could have saved upwards of $5.5 billion and performed better with passively managed stock portfolios that simply tracked the major stock indexes like the Standard and Poor’s 500.

To read the full article, click here.

[uam_ad id=”61456″]