Pennsylvania State Employees' Retirement System (PA SERS)

The Board meeting included a commendation for a departing board member. The Investment Committee presented a 2026 work plan, a capital markets update, investment performance reviews, and received approval for new investment allocations in Francisco Partners Fund 8 and co-investment vehicles. The Board Governance and Personnel Committee presented its 2026 work plan, authorized compensation adjustments for investment professionals, and approved a salary increase for the Chief Investment Officer. Additionally, the Audit Risk and Compliance Committee presented the 2026 enterprise compliance plan and discussed account change authentication procedures.

The committee approved its work plan for the year 2026. The Chief Counsel's office provided an update on the procurement process for an independent consultant to analyze securities litigation claims, noting that a request for proposal is expected to be posted in the second quarter. The committee reviewed 2025 class action settlement recoveries and discussed a recent Securities and Exchange Commission policy statement regarding the allowance of mandatory arbitration clauses in corporate documents.

The committee reviewed the Board Self-Assessment Final Report and Skills Assessment, recommending its acceptance to the State Employees' Retirement Board. Additionally, the committee discussed the process for performance evaluations for key SERS positions. Compensation policy actions included recommending a 2.6% upward adjustment to salary bands for investment professionals and an aggregate pay increase budget of 4.25% for 2026. During an executive session, the committee discussed the Executive Director's performance and compensation, subsequently recommending a 7.8% increase for the Executive Director to the Commonwealth's Executive Board.

The committee reviewed the 2025 Stress Testing and Risk Assessment Report, which evaluates the ability of assets to pay benefits under various scenarios, and subsequently recommended its approval to the State Employees' Retirement Board. Additionally, the proposed budgets for the Fiscal Year 2026-2027 were presented and recommended for approval, covering the Defined Benefit Plan, Defined Contribution Plan, and Deferred Compensation Plan. Informational items included a report on the Empower SEC settlement and its minimal impact on participants, the distribution of the 20th Investigation of Actuarial Experience Report, a memo regarding the evaluation of board consultants, and a review of benefits and membership lists.

The committee reviewed updates regarding ongoing litigation against Porsche and Volkswagen, noting that both matters remain in motion practice. A report was provided on the procurement status of a litigation analysis consultant, with additional activity expected in the second quarter of 2026. Furthermore, the committee received an update on passive securities litigation recoveries, noting that approximately $1.1 million had been recovered as of June of the current year.