SOURCE: Pennsylvania Treasury

Pennsylvania Treasury

January 29, 2015 11:26 ET

Rob McCord to Return to Private Sector

Plans to Resign as State Treasurer

HARRISBURG, PA--(Marketwired - January 29, 2015) - After six years of elected service -- in which he helped deliver positive investment returns, modernize critical systems, and improve efficiencies and performance -- state Treasurer Rob McCord announced today his intention to step down from his position, effective Feb. 12.

A copy of his letter to Governor Tom Wolf is attached.

"It has been the privilege of a lifetime to serve the citizens of Pennsylvania as their elected State Treasurer for the past six years," McCord wrote to Gov. Wolf. "But with my goals at Treasury now achieved -- and with a new governor now in office to appoint my successor -- it is time for me to return to the private sector," McCord said.

During his time in office, McCord and his team:

  • Eliminated the prior $400 million unfunded liability within Pennsylvania's College Tuition Account Guaranteed Savings Program; 
  • dramatically improved operational efficiencies of the department, increasing revenues from non-investment activities per employee by 133 percent during his six years;
  • helped reduce the risk and increase the return on a variety of state investment portfolios;
  • modernized the state's information technology and payment systems with a large, award-winning project that came in 20 percent under budget;
  • dramatically expanded Treasury's role as a fiscal watchdog (e.g., recently triumphing in a struggle with the NCAA to keep Penn State fine money in Pennsylvania); and
  • initiated and expanded a number of innovative Treasury programs that help Pennsylvanians save money, afford higher education, make their homes more energy efficient, and prepare for retirement.

"Whoever steps into this office will inherit an operation that is more efficient and more productive than it was six years ago. The Pennsylvania Treasury has been dramatically modernized and, as a consequence, is better able to meet future challenges.

"In addition, Treasury now has a larger role as a fiscal watchdog. We have waged and won important battles to open up the Gaming Control Board, control and manage state debt, stop improper contracting practices, and thwart misguided and wasteful privatization efforts.

"Last, but certainly not least, we stepped in to protect public funds by ensuring that the money Penn State was obligated to pay as a fine imposed by the NCAA will be used exclusively within Pennsylvania for child abuse prevention and treatment programs," explained the treasurer. "That victory helped make this seem like a good time to move on.

"We repeatedly showed how the application of sound business logic can make state government work more efficiently -- and help Treasury serve as a bigger profit center for the citizens of Pennsylvania.

"We've generated nearly $800 million in net revenue for the commonwealth through our unclaimed property program alone. That's 25 times more than the cost of our entire operation. Plus, we saved an estimated $550 million over the past six years by identifying and stopping redundant and erroneous payments," said Treasurer McCord. 

McCord also said he was proud of the role he played in protecting pensions for public servants and education professionals, while championing the superior performance of defined benefit plans (as opposed to more expensive and less efficient defined contribution plans). This week, the National Conference on Public Employee Retirement Systems gave McCord the "Elected Official of the Year" award.

"I leave knowing I have accomplished my main goals," McCord continued. 

"When I came to Pennsylvania's Treasury in 2009, I saw a financial crisis and many areas where we could do a far better job for the taxpayers. We have done that. 

"We entirely repaired a $400 million unfunded liability in Pennsylvania's defined-benefit Tuition Account Program, and we dramatically increased investments and reduced fees with Vanguard and our own Guaranteed Savings Plan.

"And I was proud to be part of the recent successes at both of our largest state pension funds; both funds have dramatically outperformed our actuarial assumptions for returns, while reducing risk," McCord noted.

Before being elected in November 2008 and re-elected to a second term in 2012, McCord, 55, was an entrepreneur and technology-oriented investor who helped create more than 2,000 Pennsylvania jobs.

"I will forever be grateful for the opportunity to serve as one of Pennsylvania's statewide elected officials -- and grateful for the kindness and hard work of my many talented colleagues. I am also thankful for the enduring friendships I have made as a result of my time in elected statewide office," McCord concluded. "With warm appreciation, I will carry those friendships into the next chapters of my life."

McCord appointed Treasury Chief Counsel Christopher Craig to serve as acting Treasurer until Governor Wolf nominates a successor who is confirmed by the Senate and assumes the office.

For more information, visit www.patreasury.gov.

January 29, 2015

The Honorable Tom Wolf
Governor
Commonwealth of Pennsylvania
225 Main Capitol Building
Harrisburg, Pennsylvania 17120

Dear Governor Wolf:

Please accept this letter as formal notification that I will resign from the Office of State Treasurer, effective 5 p.m. on February 12, 2015. It has been the privilege of a lifetime to serve the citizens of the Commonwealth as their elected State Treasurer for the past six years. But with my goals at Treasury now achieved -- and with a new Governor now in office to appoint my successor -- it is time for me to return to the private sector, where most of my life's work has been.

I am proud of our achievements at Treasury over my six years in elected office, a period that included many economic challenges. In particular, our team has: 

  • Eliminated the prior $400 million unfunded liability within Pennsylvania's College Tuition Account Guaranteed Savings Program;
  • Significantly grown the amount of abandoned property remitted to the Commonwealth as well as the amount returned to the rightful owners;
  • Increased the amount of improper payments identified and blocked by the Bureau of Fiscal Review, saving the Commonwealth more than $500 million during my tenure;
  • Created a periodic short-term lending initiative to the Capital Fund which has achieved millions in savings;
  • Protected the prerogative of the State Treasurer to actively oversee deliberations of the Pennsylvania Gaming Control Board;
  • Reformed the operations of the Commonwealth's tax appeals process to create increased transparency and independence (Bureau of Finance and Revenue);
  • Expanded the number of innovative Treasury programs that help Pennsylvanians save money, afford higher education, upgrade their homes, or prepare for retirement; 
  • Modernized an antiquated 1970s-era information technology system that was at risk of failure, with a massive upgrade project that came in 20 percent under budget; and
  • Successfully prevented the diversion of the NCAA's $60 million fine against Penn State, ensured that the funds will be used for child abuse prevention programs exclusively within the Commonwealth.

As Treasurer, I have had the good fortune to serve in a department with an extraordinary number of highly professional and talented employees. The daily dedication and commitment to the public interest that is shown by those who work in Treasury is a true example of what it is means to be a public servant. 

Be assured that as I resign as State Treasurer, I leave the office under highly competent guidance and stewardship. I have designated Christopher B. Craig, current Chief Counsel to the department and former acting Chief of Staff, to assume the duties and responsibilities of the Office of State Treasurer until such time as a successor is nominated, confirmed and duly qualified pursuant to the state Constitution. 

I would be remiss if I were to conclude this letter without once again offering you my personal congratulations on your recent election as Pennsylvania's new Governor. As I leave this elected office, I know the citizens of the Commonwealth will be well served by your stewardship. 

Sincerely,

(signed)

Robert M. McCord
Treasurer

cc:The Hon. Michael Stack, Lieutenant Governor
 The Hon. Kathleen Kane, Attorney General
 The Hon. Eugene DePasquale, Auditor General
 The Hon. Joseph Scarnati, President Pro Tempore of the Senate
 The Hon. Jay Costa, Minority Leader of the Senate
 The Hon. Michael Turzai, Speaker of the House of Representatives
 The Hon. Frank Dermody, Minority Leader of the House of Representatives

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