A leading pension investigator alleges that Minnesota’s public school teachers’ retirement system, under the direction of Gov. Tim Walz (recently named by Vice President Kamala Harris as her running mate), has manipulated financial reports by grossly understating the annual fees it pays to Wall Street investment managers and showing unrealistically high rates of return. New York Post This is the first time it has been reported.
Independent pension researcher Edward Siedle claims the state’s Teachers Retirement Association has disclosed less than 10 percent of the $2.9 billion in fees it paid over the past decade. He also criticized the TRA’s reported profits for being just 0.2 percent above the association’s threshold, calling it “virtually impossible” in The Washington Post.
“Even Bernie Madoff didn’t claim to beat the market every year, much less by the exact same percentage,” Seidl said, calling TRA’s performance “a Madoff miracle on Waltz’s watch.”
The late financier Madoff orchestrated the largest investment fraud in Wall Street history, pleading guilty in 2009 to running a Ponzi scheme that defrauded thousands of people out of their retirement savings.
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Democratic presidential candidate Vice President Kamala Harris and running mate Minnesota Governor Tim Walz arrive at a campaign rally in Philadelphia. (AP Photo/Matt Luke)
Walz, who has served as chairman of the Minnesota State Retirement System since January 2019, oversees $140 billion in state employee funds, including $28.2 billion for teachers, according to the media report.
“I don’t know if this person had any prior knowledge of finance or pensions, but as chairman he should have educated himself,” Seidl said. “Pension committee members have a fiduciary responsibility to monitor fees and ensure that investment performance is accurately disclosed.”
Katie Dickerson, a teacher nearing retirement age, testified in February that despite high contribution rates, there have been no improvements to the retirement plan, she has been working longer and faces hefty penalties for early retirement.
“Not only do we pay higher contribution rates into our pension and retirement systems, but we’re also being forced to work many more years unless we pay huge penalties,” Dickerson was quoted as saying by the Minnesota Legislative Pension and Retirement Committee.
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The Minnesota Teachers’ Retirement System is accused of understating the annual fees it paid to Wall Street investment managers and manipulating financial reports. (AP Photo/Peter Morgan)
For fiscal year 2023, TRA reported revenue growth of 8.9% and management fees of $24.19 million. But Mr. Siedle estimates the actual fees will be between $334 million and $467 million, or 5% to 7% of TRA’s personal assets. Even a 1% fee would total $280 million, more than 10 times the reported amounts. Mr. Siedle’s requests for investment documents have not yet been fulfilled by TRA or state agencies.
The Minnesota attorney general and state auditor, who would normally investigate such matters, sit on the state pension board chaired by Walz, according to Mr. Seidl’s report, which prompted Mr. Seidl to file a whistleblower’s complaint with the SEC and FBI in July, The Washington Post reported.
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Democratic vice presidential candidate and Minnesota Governor Tim Walz spoke during a campaign rally in Detroit. (Andrew Harnick)
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The Harris-Waltz campaign did not immediately respond to Fox News Digital’s request for comment.
