after decades of underfunding, the city pension system now has less than $4 billion on hand to pay future liabilities it estimates at more than $9 billion....the city has paid around $30 million to more than three dozen private money managers to invest the pension funds. A majority lost money in the volatile markets...The board has long issued a slick annual report that's a laughable 15 months out of date by the time it's printed. Handa added monthly and daily reports so board members understood better where public money was going and why the funds gained or lost value...He also started moving money away from private firms. Before he arrived, the board had recently fired two local money managers, Penn Capital Management Co. of Philadelphia and Turner Investments of Berwyn, for underperformance. Instead of finding other firms to run the $43 million those two had invested...Butkovitz spoke approvingly of a recent decision to fire private managers of a $400 million Philadelphia Gas Works investment portfolio and move the money to low-fee Vanguard Group index funds. In August, the Philadelphia pension board approved this first part of Handa's plan; other changes are still in the works...Then Bill Green, the at-large councilman who'd like to be mayor someday, called for hearings into the internal-management proposal. The effect has been to delay the move.
What's Green thinking? "I recognize this is only 1 percent of the pension funds, but I'm concerned about giving someone this, like Monopoly money, to invest without a certain accountability," Green told me.
What does he want instead? "I want to make sure Philadelphia managers, with local employees making the investment decisions, have a fair shot getting money from the pension fund," he said.
But the city already gives locals a shot, and it just had to fire some of them for poor performance, I pointed out...