Unique | Minnesota teacher pension fund under Tim Walz ‘openly cooked,’ investigator finds: ‘Not seen for decades’

A pension investigator has found the books of the Minnesota state pension system under Gov. Tim Walz’s watch “clearly cooked” and shrouded in secrecy – prompting teachers in his state to ask the vice president to be honest about the dysfunctional and capital investment process. hidden charges.

Edward Siedle, a former US Securities and Exchange Commission attorney who is privately hired by concerned educators, recently published a 113-page report titled, “Minnesota Mirage: Sleight of Hand.”

“Investment returns are inflated, and fees are largely underreported to make pensions appear to be doing better than they really are,” Siedle told The Post. “This has gone undetected for decades.”

As governor, Walz is chairman of the Minnesota State Retirement System, which manages $146 billion in pension funds for all state employees, including $28.2 billion for teachers.

Walz, a former teacher and beneficiary of a pension system, has never owned a stock or bond, he says in financial disclosures.

Teachers in the 20,000-member Minnesota Educators for Pension Reform Facebook group said Walz “has not shown support” for their call to open the pension fund’s tightly controlled books.

“So far, he hasn’t responded, and I find that disappointing,” said MaggieTemple, who teaches social studies at a high school near Minneapolis. “But I also realize that he is 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 are such an advocate for teachers, why did 20,000 teachers in your country lose faith in the pension system you oversee and order an independent audit?” Siedle asked Walz.

The Teachers Retirement Association, which administers pensions for 215,000 active and retired teachers, has publicly disclosed less than 10% of the estimated $2.9 billion paid to Wall Street fund managers over the past 10 years. ago, Siedle reports.

For example, in 2023 the TRA disclosed investment rates of only $24 million. Siedle estimates management fees for $6.6 billion in private equity funds alone at $334 million to $467 million, depending on industry standards.

TRA has also set a profit margin of 0.2% per period for 30 years – which Siedle says is “impossible.”

Siedle reads: “Had the pension fund been managed wisely, it would be worth $60 billion today, providing greater retirement security for participants and keeping those pay billions in taxes.” said – calling the deficit “the cost of not knowing.”

Even before Siedle began his investigation, federal officials launched a “front-loading offensive” in an effort to end his investigation, he found. They encouraged teachers in a Facebook group to drop the investigation, and held Zoom meetings with pension officials in other states to discuss how to stop the “union.”

“TRA’s reputation as a trusted government agency will be called into question,” Jay Stoffel, TRA’s chief executive, warned Siedle in an email to the board, other government officials and developers. the law.

When Siedle requested investment reports under the Freedom of Information Act, the TRA said it did not have them – a response that surprised teachers.

The TRA referred his questions to the State Board of Investment, which has yet to produce the reports; “We found nothing,” Siedle said.

His findings have raised suspicions that the TRA has covered up maladministration. Some experienced educators have complained of “reduced methods” and unexpected punishments.

Teachers support Kamala Harris for president, Temple said, but complain that her running mate has ignored their calls for a full pension fund.

“Tim Walz is an honorable man,” Temple said. “So I hope this is over now, when the governor has time to look at it, or assign lieutenant governor Peggy Flanagan to do it.”

Meanwhile, Minnesota news outlets have completely ignored the story, further confusing the teachers.

“Pension officials were hoping there would be no media scrutiny,” Siedle said. No one ever asked them.

CNN reported Friday that Walz and his aides have repeatedly downplayed or dismissed federal investigations that have found waste, theft and abuse in government programs, reacting with hostility and contributing to a “culture of irresponsibility.”

“The hate is being led by Governor Walz,” says Sen. Mark Koran, Republican and vice chairman of the bipartisan audit commission, told CNN.

TRA executive director Jay Stoffel and Harris-Walz spokesman Kevin Munoz did not return requests for comment.