State Auditor Pat Anderson is probing the finances of the Minneapolis Teachers Retirement Fund Association, less than two weeks before a statewide teachers fund takes over the troubled fund.
Anderson said Tuesday she plans to examine records related to a $1.5 million liquidating trust created by the Minneapolis fund's board on May 22, just five days before Gov. Tim Pawlenty signed a bill authorizing the takeover by the state Teachers Retirement Association.
The auditor issued a subpoena for the records Tuesday, said Deputy Auditor Tony Sutton.
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The takeover law prohibits the Minneapolis fund from entering into any contracts without TRA approval, as of May 27. Anderson questioned the timing of the liquidating trust's creation and said the trust would benefit trustees and the fund's executive director, not retirees.
"We view this as an illegally created trust and an illegal transfer of pension fund assets," Anderson said in a prepared statement.
Karen Kilberg, executive director of the Minneapolis Teachers Retirement Fund Association, did not immediately return a message left with the association.
The Minneapolis teachers fund struggled for years with low investment returns and unfunded pension obligations, prompting lawmakers to step in. The larger Teachers Retirement Association will absorb almost $1 billion in future liabilities to retired Minneapolis teachers.
The Minneapolis teachers fund will no longer exist on June 30, when the takeover is effective.
(Copyright 2006 by The Associated Press. All Rights Reserved.)