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Investments & Finance

How Rhode Island Pension Funds Are Invested

A robust state retirement system plays a critical role in recruiting and retaining talented employees on whom Rhode Island depends for quality public services, such as teaching in our schools, fixing our roads, protecting our environment and policing our streets.

A strong system requires effectively managing both the liabilities and assets of the retirement system through constant monitoring and accountability.

The State Investment Commission (SIC) oversees the assets of the pension system. The SIC has a fiduciary duty to put first the interests of the members of the retirement system, and to pursue the best investment portfolio possible.

In building the portfolio, the SIC has implemented an investment strategy that strives to generate strong, long-term returns while minimizing risk.

To seek strong long-term returns while mitigating risk, the SIC diversifies its investments. Bonds, stocks and other investments all play different roles in the portfolio. As part of this approach, the SIC allocates a percentage of its assets to “alternative” investments, such as private equity, real estate and hedge funds. These investments all have different roles to play in the portfolio, based on the economic environment.

Managing risk is particularly crucial for the pension fund. While reforms to the liability side have significantly improved the funding ratio, the fund still pays out more than it receives every month. It has limited ability to withstand another downturn like the 2008-09 global financial crisis.

Given the importance of providing retirement security to public employees and retirees, the SIC is constantly evaluating its investments, holding all managers and consultants accountable and making changes as necessary.

The Facts on Rhode Island's Pension Investments

Recent reports have mischaracterized the work of the State Investment commission. Below see the response from the state's Chief Investment Officer.

Returns as of 03/31/14*

11.01%

1 Year Return

8.18%

3 Year Return

13.68%

5 Year Return

6.66%

10 Year Return

$8,051

Total Plan Value
(in millions)

* Returns are net of all consultant and investment management expenses

Download the current
State Invesment Commission Report

Exposures as of 03/31/14

Asset Classes as of 03/31/14