For decades, state pension funds have relied on the private equity industry to invest retirement savings for teachers, firefighters and other public-sector employees. But in recent years, critics of alternative assets have argued that pension managers, who oversee some $4.5 trillion across the US, would be better served investing in low-cost index funds that track the S&P 500 and avoiding PE’s high fees.

This past week, public pension fund managers threw PE detractors more red meat, raising larger questions about the longstanding practice of smoothing returns and who exactly holds pension fund managers accountable when they underperform.

In Pennsylvania, a half-dozen trustees on the board of the Pennsylvania Public School Employees’ Retirement System, a $64 billion pension fund, have reportedly called for the resignation of executive director Glen Grell and CIO Jim Grossman. The trustees have denounced the pension fund’s investment performance and its payment of management fees totaling more than $4.3 billion over the past four years, exceeding the roughly $4.2 billion paid in by fund beneficiaries, The Wall Street Journal reported.

Oh, and in March the FBI launched an investigation into PSERS over a possible bribery, according to The Philadelphia Inquirer. And Pennsylvania state senator Katie Muth reportedly sued the pension over a lack of transparency around its investment decisions. Not exactly the kind of publicity a pension fund wants.

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