Republican state treasurer candidate Diana Irey Vaughan on Thursday accused Democratic incumbent Rob McCord of not doing enough to avert Pennsylvania’s looming public pension crisis, while the McCord campaign dismissed her comments as “long on political attacks and short on business sense.”
Vaughan, a Washington County commissioner, who ran against U.S. Rep. John P. Murtha in 2006, said a more conservative approach is needed to help close the growing gap between funding and benefits in the two major pension funds that cover hundreds of thousands of state and public school employees. She said that, if elected, she would work to reduce the general fund debt, simplify state investments and “responsibly” fund the pension funds.
In response, McCord’s campaign defended his track record. Campaign spokesman Mark Nevins said McCord’s influence over the investment of roughly $65 billion in pension funds is limited to his single votes on the 11-member State Employees’ Retirement System board and the 15-member board of the Public School Employees’ Retirement System.
Nevins said a better gauge of McCord’s performance is the turnaround of a program in which he is the sole fiduciary.
Funding in the PA 529 College Savings Program increased from 70 percent to
98 percent under McCord’s leadership, Nevins said.
In July, New York-based Moody’s Investors Service cited the state’s pension problems in lowering the state’s bond rating. The Legislature and Gov. Tom Corbett are developing measures to blunt a spike in taxpayers’ share of the pension funds, which is expected to grow from about $1 billion to more than $4 billion in five years.
Vaughan noted that McCord was a venture capitalist before he was elected in 2008, and suggested that he was too willing to tolerate risk and excessive management fees.
“It seems that that same kind of risky Wall Street venture capital portfolio mindset has been carried into the treasury,” she said in a teleconference with reporters. “Public monies are different, and you have to have a different approach when you’re looking at what you’re going to do with somebody else’s finances.”
Nevins said Vaughan lacks credibility.
“She views everything through a political lens because that’s all she’s ever known,” he said. “Rob is a business leader so he sees things through a business perspective.”
The three-year average returns, which take management fees into account, were 10.9 percent for SERS and 12.57 percent for PSERS, both well above actuarial projections during the period that McCord has been in office, Nevins said.
The race for treasurer has been the most low-profile of this year’s campaigns for the three statewide row offices, which also include state attorney general and auditor general.
McCord’s campaign had $2.1 million on hand as of the mid-September closing date of the latest campaign finance reports. Vaughan, who has 17 years’ experience as a county commissioner, reported $22,000.
The election is Nov. 6.
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