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Retirement system board must be frugal on conference attendance

Board members of the Pennsylvania Public School Employees' Retirement System, who up to now have experienced little, if any, public scrutiny of their official travel decisions, apparently won't have that luxury any longer. And, that is as it should be.

The system, which manages $50 billion in investments and operates on a $39.5 million operating budget, has a responsibility to taxpayers across the state, as well as to the people it directly serves. That is because public tax revenues help fund the pension system.

And, with that infusion of public money comes the public's right to know that the system's decisions are in the taxpayers' best interests.

Whether the system board's spending of $55,700 on travel last year was excessive is a matter to be pondered by taxpayers.

While the amount is but a pittance of the system's operating budget, the fact that board members are attending conferences at locations such as Honolulu and Tampa, Fla. — with the public paying the bill — should not go unnoticed.

That is not to imply that the board should reject attendance at all distant conferences. However, the board must be able to justify attendance based on importance of information that will be available, and the contacts that will be available, at such a conference.

Still, the 2005 spending merits a measure of concern as a result of an opinion expressed by Richard Rowland, executive director of the Pennsylvania Association of School Retirees, whose members are receiving retirement benefits.

"This (expensive travel) is arrogance and total insensitivity to both the state and taxpayers, who are facing these large increases in contribution rates, and to the retirees themselves," Rowland said.

Rowland was referring in part to a projected large increase in school district contributions to the system, possibly in the 2007-08 fiscal year. That contributions increase is expected to have a significant negative impact on property owners' tax bills.

But the opinion of Roger May, board chairman, must be factored in to the discussion about travel expenses.

"I absolutely have to keep on top of all things changing within the parameter of investments," May said. "We hire professionals to make recommendations, but if we have no knowledge of what's going on, we don't know whether or not we approved something rational or someone had a silly idea and let's take a chance."

His points are reasonable.

Meanwhile, the fact that the fund generated a 12 percent return over the past year within the environment of low interest rates cannot be overlooked.

The retirement system's travel practices came to light as a result of an inquiry by a Harrisburg newspaper, which is examining various facets of state government spending. From now on, the system's travel expenditures should be scrutinized by the news media annually to determine how it stacks up against 2005's expenditures.

Attending a conference at a luxury hotel in a resort atmosphere isn't an affront to the taxpayers, as long as those attending can show that the people paying the bill truly are getting their money's worth.

The jury's still out on whether Pennsylvania's taxpayers got their money's worth for the amount the retirement system spent on travel last year. It's the retirement board's responsibility to provide that proof.

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