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Investments & Finance

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.

How Rhode Island Pension Funds Are Invested

Current Data as of 2/28/14*

12.34%

1 Year Return

8.49%

3 Year Return

14.39%

5 Year Return

6.62%

10 Year Return

$8,070

Total Plan Value
(in millions)

* Returns are net of all consultant and investment management expenses

Download the current
State Invesment Commission Report

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

Effectively managing both the liabilities and assets of the retirement system requires constant monitoring and accountability.

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

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

To achieve this strategy of strong long-term returns while minimizing 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” investment managers, such as private equity, real estate and hedge funds.

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, and 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 the investment approach, holding all managers and consultants accountable and making changes as necessary.