A Senate panel is considering adding two new commissioners to the state Retirement System Investment Commission, the group that manages state retirees’ $28 billion pension.
Senators on a Senate Finance subcommittee presented their findings and recommendations to the full committee Tuesday after concluding a three-month-long series of hearings in March aimed at bringing peace to the commission. State Treasurer Curtis Loftis, an ex-officio member of the commission, has been at odds with his six fellow commissioners over the approximately $420 million in fees the group paid to money managers in 2013. Loftis has said the fees are too high for the low-ranking returns—the bottom 20 percent in the nation.
The fees the commission reports don’t reflect an apples-to-apples comparison of pensions nationwide, the subcommittee found. RSIC reports all its fees, but many funds only report management expenses. Tied directly to returns, the portfolio is set up to minimize volatility long-term. Approximately 40 percent of the pension is invested in non-traditional investments, said Sen. Joel Lourie. The Columbia Democrat led the subcommittee along-side Sen. Kevin Bryant, R-Anderson.
The commission is awaiting a study by the consulting firm, Funston Advisory Services, which will provide a comparison of management fees paid by pensions nationwide. That report is expected some time in April.
Bryant said the group would look into other reforms, but that one they could all agree on would be two additional commissioners. Ideally, those two would have a background in or understanding of pensions, said Bryant. Lawmakers are mulling the possibility of pulling experts from constituent groups.
Currently the treasurer is the only commissioner not required to have an investing background.