In a sign of more turmoil at Pennsylvania’s largest pension fund, the $64 billion retirement plan for teachers on Tuesday hired an outside manager to oversee its complex and low-performing investments.

Seattle-based Verus Investments will take on “monitoring and oversight of investment,” the job done by PSERS’s chief investment officer, James Grossman, the highest-paid employee of Pennsylvania government. Grossman has been the architect behind the fund’s pursuit of exotic and far-flung investments that have drawn increasing criticism.

Grossman hasn’t left his position. But the “emergency” hiring is needed to monitor and oversee investments during “internal and external investigations” of PSERS investments, the fund said.

The scrutiny includes a federal probe of a flurry of real estate deals in Harrisburg and investigation by outside lawyers into an “error” that exaggerated PSERS’ investment profits.

Citing that mistake, the fund on Monday took the painful and embarrassing step of reversing its previous stand and requiring school employees to pay more to support their retirement.

The reversal came after the fund’s executives, including Grossman, had reported the inflated investment results, citing them as a reason not to increase payments by employees.

The Monday vote was a bitter one for teachers. It will boost payments to PSERS — the Pennsylvania School Employees’ Retirement System — for about 100,000 school workers hired since 2011.

» READ MORE: PSERS board reverses course and raises pension payments made by Pa. school employees

Their annual deduction will climb to 8% of their pay, up from 7.5%. Such a teacher earning $60,000 a year will pay about $4,800 to PSERS, an increase of $300.

Teachers and other educational staff hired since 2019 will face an even bigger bump: up to 8.25%.

Union leaders were caustic. Arthur Steinberg, head of the Pennsylvania unit of the American Federation of Teachers, which represents 36,000 teachers in Philadelphia and 60 other districts, cited recent revelations in The Inquirer of extravagant travel by Grossman’s investment staff as more reason for outrage.

“After being wined and dined at the expense of Pennsylvania’s educators, it is infuriating, but unsurprising, to learn that the PSERS board has voted to take more money out of the pockets of the commonwealth’s educators,” Steinberg said.

The national AFT recently published a report highly critical of private investment firms such as the ones favored under Grossman, citing academic studies showing that past returns had been no better than the stock market.

Here’s why PSERS was forced to raise rates for school employees. Under a 2010 pension reform law, teachers must join taxpayers in paying more into the fund if the retirement plan does not meet specified goals for investment returns.

But in 2020, the fund’s professional staff reported that PSERS’s investment returns had averaged 6.38% over the last nine years — just above the critical 6.36% threshold goal.

Then-state Treasurer Joe Torsella disputed the math, noting that the staff had gone back almost a decade to revise — and improve — figures for past investment performance.

PSERS’s executive director, Glen Grell, rejected Torsella’s concerns, saying that “the adjustments are not errors.” The Inquirer published copies of their exchange last week.

In December, the full board approved the revised number. Torsella was one of three board members to abstain, along with State Rep. Frank Ryan (R., Lebanon) and Richard Vague, the state banking secretary.

Board chairman Chris Santa Maria, a Lower Merion teacher, and the senior pension staff, including Grossman, insisted that the numbers were solid.

“We did our due diligence,” Grossman said. “We covered it. I’m not worried about it.”

Grossman, a 1989 Elizabethtown College accounting graduate, has worked at PSERS since 1997. He became chief investment officer in 2013. He makes $485,000 a year.

The PSERS board has said little about how the math mistake occurred. Nor has it disclosed the new and lower figure for investment returns. But in late March, it said it was looking into the conduct of both its own staff and outside consultants who advise PSERS.

PSERS is also facing an FBI investigation into the fund’s purchase of millions of dollars in real estate in Harrisburg over the last few years, The Inquirer has learned.

It’s unclear whether the federal prosecutors and FBI agents with the U.S. Attorney’s Office in Philadelphia are also looking at the error in investment returns.

In recent years, the giant fund has been criticized for its lagging returns, especially given the plan’s underfunded condition going back 20 years. In its last fiscal year, ended June 30, the plan had an investment rate of return of only 1.1%, compared with 5.4% for the S&P 500.