Minnesota’s state retirement system books were “blatantly falsified” and secretly covered up under Gov. Tim Walz’s watch, pension investigators have discovered, leaving Minnesota’s teachers as vice presidential candidates. They are pleading with the public to tell the truth about their lackluster investment performance and huge pensions. hidden fees.
Edward Seidle, a former U.S. Securities and Exchange Commission attorney privately hired by concerned educators, published a bombshell 113-page report titled “The Minnesota Mirage: A Magic Trick.”
“Investment returns are inflated and fees are grossly underreported to make pensions look better than they actually are,” Seidle told the Post. “This went undetected for decades.”
The teachers raised $75,000 for Edward Seidle, a former SEC attorney and independent pension examiner, to audit their pension funds. Provided by Edward Seidle
As governor, Walz chairs the Minnesota Retirement System, which oversees $146 billion in pension funds for all state employees, including $28.2 billion for teachers.
Walz, a former teacher and pension plan recipient, claims in his financial disclosure that he has never owned stocks or bonds.
Teachers in the 20,000-member Facebook group Minnesota Educators for Pension Reform said they “absolutely do not support” Walz’s plea to release the pension fund’s tightly kept books. “It does not show that,” he said.
“So far he hasn’t responded, which is unfortunate,” said Maggie Temple, who teaches social studies at a high school near Minneapolis. “But I also recognize that he was very busy running for vice president.”
The group’s GoFundMe campaign raised $75,000 in February to hire Siedle to conduct an independent audit.
“If you’re such a teacher advocate, why did 20,000 educators in your state lose faith in the pension system you oversee and request an independent review?” Seidle asked Walz. Ta.
The Minnesota Teachers Retirement System, which runs a $28 billion pension fund, claimed it had no investment records. minnesotatiger.org
The Teachers’ Retirement Association, which manages pensions for 215,000 active and retired teachers, has disclosed as much as 10% of the estimated $2.9 billion in fees paid to Wall Street fund managers over the past decade. Not enough, Cider reported.
For example, in 2023, TRA disclosed total investment fees of just $24 million. Based on industry standards, Mr. Seidle estimates the fees alone for managing the system’s $6.6 billion in private equity funds to be between $334 million and $467 million.
TRA also claims to have made a profit by just 0.2% over its own benchmark in each of the 30-year period, which Seidle said is “virtually impossible”.
Seidle calculated that the teacher pension system has underperformed by $39 billion over the past 30 years. “If the pension fund had been managed carefully, it would be worth nearly $60 billion today, provide greater retirement security to members, and save taxpayers billions of dollars. ” he calculates. He called the shortfall “the price of incompetence.”
Even before Mr. Seidl began his audit, he found that state authorities launched an “aggressive pre-emptive strike” in an attempt to destroy his investigation. They urged teachers in a Facebook group to stop the investigation and held a Zoom meeting with pension officials from other states to discuss ways to stop the “movement.”
“TRA’s reputation as a trusted government agency will be called into question,” TRA Executive Director Jay Stoffel said in an email to the board, other state officials, and legislators. warned about.
When Seidle requested investment records under the Freedom of Information Act, the TRA claimed there were none, a response that shocked teachers.
TRA referred his inquiry to the state investment commission, which has yet to produce any records. “We haven’t received anything,” Seidle said.
His findings raised concerns that the TRA may have covered up mismanagement. Some veteran educators are unhappy with the “drastic reduction in benefits” and unexpected penalties.
Teachers primarily support Kamala Harris for president, Temple said, but have complained that her running mate is ignoring their pleas for a full accounting of the pension fund. It is said that there is.
“Tim Walz is an honorable man,” Temple said. “So now that this issue has come to light, I hope the governor will either look into it when he has time or assign Lieutenant Governor Peggy Flanagan to do that.”
Meanwhile, Minnesota news outlets are completely ignoring the story, making teachers even more frustrated.
Gov. Walz, a former teacher, says he has “zero support” for educators who are begging the state to overhaul its retirement system. David Muse/CNP/SplashNews.com
“Pension officials were confident there would be no media scrutiny,” Seidle said. “No one ever questioned them.”
CNN reported Friday that Walz and his allies have repeatedly downplayed or dismissed state audits that found waste, fraud and abuse in government programs, reacted with hostility and contributed to a “culture of unaccountability.” It was reported that
“The hostilities are being led by Governor Walz,” Republican state Sen. Mark Colan, vice chairman of the bipartisan audit committee, told CNN.
TRA Executive Director Jay Stoffel and Harris Walz spokesman Kevin Munoz did not respond to requests for comment.
