OUR TURN: Employees’ Retirement System of Rhode Island Performs Better than Many U.S. Pensions for 1Q2020
Posted on 05/30/2020
Rhode Island’s Office of the General Treasurer has reported that the Employees’ Retirement System of Rhode Island, a US$ 8.3 billion fund, earned a spot in the top 5% of retirement funds in the first quarter of 2020. The pension fund is overseen by the Rhode Island State Investment Commission. Although it absorbed a loss of 9.5%, that was better than 95% of other state funds in the same time period. Rhode Island could use some good news after a meager 6.4% return over the last decade. However, a strong 2019 gave Rhode Island returns of 16.7% for that year. Treasurer Seth Magaziner told Rhode Island’s WPRI the relative success of the fund would be a relief for “Taxpayers who would be required to make up the difference.” Magaziner then said US$ 800 million of the portfolio is “made up of investments that typically go up in value when everything else is going down.” This part of the portfolio earned 15% returns in the first quarter, helping to partially offset losses elsewhere. The pension then took in US$ 450 million from its investments in April 2020 when the market sprung back. The fund pays out US$ 970 million per year. Magaziner used to work at Boston-based Trillium Asset Management before becoming State Treasurer.
Fund management is active in the local community, assisting organizations such as Operation Stand Down Rhode Island, a nonprofit for veterans. The group also makes high-profile visits to senior centers and farmers markets. A variety of other programs are intended to help citizens of the state, including a Crime Victim Compensation Program that doled out US$ 1 million to 1,200 victims in 2019.
CIO Exits
Despite the strong returns, the Rhode Island State Investment Commission lost its chief investment officer – Alec Stais. Stais is exiting the pension to become CIO of Providence Health and Services, a healthcare system based in Washington state. Previously, Stais worked at Goldman Sachs Asset Management where he worked for more than 20 years. Stais joined the Rhode Island retirement system in 2017. Stais had replaced Tim Nguyen, who had been the state’s interim chief investment officer from June 2016 when former CIO Anne Marie Fink exited.
