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News and Updates (Archived)

Pension Fund Earns $125 Million in July, Outperforms Benchmark

August 23, 2018: Rhode Island's pension fund continued to deliver strong performance under Treasurer Magaziner's Back to Basics investment strategy earning $125 million in July. That 1.51 percent return on the month finished ahead of the fund's benchmark which returned 1.31 percent. The positive performance was driven by the investments in the global stock market - mostly low fee index funds designed to provide long-term growth.

"Public servants who spend their careers deserve to know that their pensions will be there for them in retirement and taxpayers deserve to have their public pension systems managed responsibly," said General Treasurer Seth Magaziner. "My Back to Basics investment strategy is performing well and the health of the system continues to improve."

In the 3-year period ending July 31, 2018 the fund also outperformed its benchmarks; earning an annualized return of 6.68 percent versus the plan benchmark return of 6.34 percent, as well as a traditional 60 percent stock/40 percent bonds portfolio, which would have earned 6.06 over the same period.

Over a 5-year period, the fund earned an annualized return of 6.95 percent, outperforming the internal benchmark return of 6.71 percent and a 60/40 benchmark, which posted 6.41 percent.

Detailed information about the $8.4 billion fund, including the Back to Basics investment strategy, performance, and detailed information about its managers are published online as part of Treasurer Magaziner's "Transparent Treasury" initiative at investments.treasury.ri.gov.

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Summer 2018 Issue of Compass, ERSRI’s Member Newsletter, is Available Online

August 2018: The Summer 2018 issue of Compass is available online. The articles in this issue include:

  • Message from Treasurer Magaziner
  • Retirement System Update
  • Member News
  • Member Spotlight: Michael Jolin - Office of Veterans Affairs
  • YOUR MONEY - Treasury's Unclaimed Property Program


                                                              # # #

Pension fund posts 8.03% return in Fiscal Year 2018 beating target and benchmarks

July 23, 2018: General Treasurer Seth Magaziner today announced that the State's pension fund finished its fiscal year ahead of its investment target and benchmarks.

The fund returned 8.03 percent in the fiscal year ending June 30, 2018, ahead of its 7.0 percent annual target and ahead of its own benchmark which returned 7.59 percent over the same period. The fund also outperformed a traditional 60 percent stock/40 percent bonds portfolio which would have earned just 6.25 percent.

With this fiscal year's performance, the $8.3 billion fund continued its strong performance under Treasurer Magaziner's administration. Since taking office in January 2015, the fund earned more than $1.67 billion from its investments, $1.24 billion of which has been earned since Treasurer Magaziner's Back to Basics investment strategy was adopted in September 2016.

Part of the Back to Basics strategy included exiting most hedge funds in favor of more traditional strategies for growth and stability. Over the past 12 months, investments in private equity returned 17.9 and global index funds earned 11.5 percent net of fees and expenses.

"We have taken our investment strategy back to basics for our members, who count on us for a secure retirement, and for all taxpayers, who deserve responsible financial management from their elected officials," said Treasurer Magaziner.

All performance figures are net of fees and expenses. Investment information, including performance, fees and expenses, information about managers, and public records requests are available online at the Treasurer's Transparency Portal at: investments.treasury.ri.gov.

# # #

R.I. Pension Fund earns $55.7 million in May

June 27, 2018: Rhode Island's pension fund continued to deliver strong performance in May, earning $55.7 million. The fund's 0.67 percent return in the month of May outperformed a traditional 60% stock/40% bonds strategy which returned 0.36.

"All Rhode Islanders deserve retirement security, particularly those who have spent their lives serving the community as teachers, civil servants and first responders," said General Treasurer Seth Magaziner. "Our continued strong investment performance in recent years is a positive development for members of the pension system and for all Rhode Island taxpayers."

Fiscal year-to-date, the portfolio earned 8.28 percent net of fees, outperforming 60% global equity/40% fixed income benchmark return of 6.65 percent.

Over a 3-year time frame, the portfolio earned an annualized return of 5.91 percent net of fees versus the 60/40 benchmark, which earned 5.18 percent.

Over a 5-year time frame, the portfolio earned an annualized return of 6.82 percent net of fees, outperforming the 60/40 benchmark, which posted a 4.81 percent return.

Detailed information about the $8.3 billion fund, including the Back to Basics investment strategy, performance, and detailed information about its managers are published online as part of Treasurer Magaziner's 'Transparent Treasury' initiative at: investments.treasury.ri.gov.

# # #

Pension Fund earns $55.4 million in April

May 23, 2018: Rhode Island's pension fund continued to deliver strong performance in April, earning $55.4 million. The fund's 0.67% return outperformed its own benchmark of 0.35 percent, as well as a traditional 60% stock/40% bonds strategy which would have returned 0.28 percent.

As of April 30, 2018, the fund has bested both benchmarks over one-year, three-year, and five-year timeframes. In the 12-month period preceding April 30, 2018, the fund returned 9.30 percent, beating its benchmark's 8.80 percent return, and the 8.25 percent return of a 60/40 portfolio. This performance was led by investments in international stock, which returned 16.36 percent and infrastructure which returned 15.14 percent for the fund.

Over a 3-year time frame, the fund's 5.79 percent annual return outperformed the 5.40 percent earnings of its benchmark and 4.99 percent from a 60/40 portfolio. Similarly, on a 5-year horizon, the fund's performance of 6.67 percent, beat out a 6.57 percent benchmark return while the 60/40 portfolio would have returned 5.95 percent annually over that same period.

Detailed information about the $8.3 billion fund, including the Back to Basics investment strategy, performance, and detailed information about its managers are published online as part of Treasurer Magaziner's 'Transparent Treasury' initiative at: investments.treasury.ri.gov.

# # #

Spring 2018 Issue of Compass, ERSRI’s Member Newsletter, is Available Online

May 2018: The Spring 2018 issue of Compass is available to read online. Articles in this issue include:

  • Message from Treasurer Magaziner
  • Retirement System Update
  • Member News
  • Member Profile: Lori Leporacci, Teacher at Potter Burns Elementary School
  • 2018 Federal Tax Witholding Information

# # #

Treasurer Magaziner, Shareholders Clear Major Milestone in Fight to Hold Student Loan Giant Navient Accountable

May 2, 2018: Rhode Island General Treasurer Seth Magaziner is leading investors in demanding answers from the nation's largest student loan servicer about its role in the growing national student debt crisis after Navient unsuccessfully attempted to blocked shareholders from voting on his proposal by appealing to the U.S. Securities and Exchange Commission.

"The student loan crisis is threatening the financial security of millions of Americans," said Treasurer Magaziner. "It is our duty as shareholders to ensure that student loan servicers have a credible plan for how to address growing levels of debt and delinquency."

Shareholders will have the opportunity to vote on Treasurer Magaziner's proposal, which is item four on Navient's 2018 proxy statement, at the company's annual meeting on May 24, 2018 in Wilmington, Delaware.

You can read the press release here.

# # #

Treasurer Magaziner, Coalition of Investors Secure Commitment from Wells Fargo to Review and Report on Business Practices that Led to Widespread Consumer Fraud

April 25, 2018: Treasurer  Magaziner was one of 23 investors that have secured a commitment from banking giant Wells Fargo to publish a business standards report on the root causes of past and present fraudulent activities, along with plans to address the systemic failures which allowed unethical and illegal practices to flourish.

"It is imperative that Wells Fargo be transparent and forthright about the corporate culture and business practices that lead to the bank engaging in massive fraud against its own customers," said Treasurer Magaziner. "The bank must continue to take steps toward real reform in order to re-establish trust with stakeholders".

Following months of engagement by concerned investors, including Treasurer Magaziner, Wells Fargo's Board of Directors agreed to publish the requested report by October 2018. Treasurer Magaziner met personally with Wells Fargo board members and executives, including CEO Tim Sloan, as part of this successful effort.

Treasurer Magaziner, on behalf of the members of the Rhode Island pension system, also cast votes in favor of a shareholder proposals with Wells Fargo (NYSE: WFC) which request additional disclosure about employee incentive compensation programs, incorporating social responsibility performance measures as a broader component of executive compensation, as well as a proposal to reduce the ownership threshold for shareholders to call a special meeting.

You can read the press release here.

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Notice Of Proposed Rulemaking - April 16, 2018

# # #

Wells Fargo Agrees to Investor Demands for Transparency and Accountability on Corporate Culture that Encouraged Massive Fraud

March 6, 2018: In response to investor demands, Wells Fargo will publish a report on the root causes of unethical and illegal behavior at the bank and its impact on customers and investors; along with and a detailed plan for corrective action going forward.

"Investors and customers deserve information on the culture at Wells Fargo which allowed systemic fraud to occur over years, and what the Bank is doing to ensure ethical behavior throughout its lines of business," said Treasurer Magaziner. "By engaging with investors, and subsequently agreeing to publish a comprehensive business review, the company is taking incremental steps toward reform and re-establishing trust with stakeholders."

Over the past two years Treasurer Magaziner has co-filed shareholder proposals requesting that Wells Fargo publish a comprehensive business standards review. During a meeting with Wells Fargo CEO Timothy Sloan in February 2017, Treasurer Magaziner expressed his concern the the corporate culture that allowed widespread fraud.

You can read the press release here.

# # #

Shareholders Overwhelmingly Demand Action from Opioid Distributor after Company Fails to Block Vote at SEC

March 2, 2018: Rhode Island Treasurer Seth Magaziner joined investors from across the country in demanding that AmerisourceBergen, the nation's third largest drug distributor, publicly address opioid-related business risks.

"Opioid-related deaths in Rhode Island are a public health crisis. With this vote, investors in AmerisourceBergen have sent a strong message to the company that we must all work together to end the opioid epidemic," said Treasurer Magaziner. "Independent investors have voted overwhelmingly in favor of more disclosure and accountability at the company."

AmerisourceBergen (NYSE: ABC) had previously appealed to the U.S. Securities and Exchange Commission (SEC) seeking to deny investor efforts to obtain information about the company's response to the U.S opioid crisis. The SEC denied those appeals, allowing shareholders to consider the proposal at the company's March 1, 2018 annual shareholder meeting in Naples, Florida.

At the meeting, 62 percent of independent shareholder votes were cast in favor of a proposal asking AmerisourceBergen's board to publish a report on the governance measures the company has implemented to more effectively monitor and manage financial and reputational risks related to the opioid crisis in the U.S.

You can read the press release here.

# # #

Treasurer Magaziner Adds Gun-Free Investment Option to State Retirement Fund

February 28, 2018: Treasurer Magaziner has recommended, and the State Investment Commission has approved, a new socially responsible investment option -which excludes companies that manufacture firearms- for Rhode Island's 401(a) Defined Contribution plan.

"We know that members are interested in having their investments reflect their values, not only on guns, but also on environmental and social issues," said Treasurer Magaziner. "Rhode Island is one of the only states to include a socially responsible option in a Defined Contribution plan."
 
State employees who invest in Rhode Island's 401(a) Defined Contribution plan will have the option to invest in the Vanguard FTSE Social Index Fund (MUTF: VFTSX). This low-cost fund seeks to track a benchmark of large- and mid-capitalization stocks that have been screened for social, human rights, and environmental criteria.
 
"It is important that all of our elected officials take steps to reduce gun violence," said Linda Finn, President, Rhode Island Coalition Against Gun Violence. "I commend Treasurer Magaziner for offering a retirement investment option for State employees that includes a weapons restriction."
 
State employees will have the option to invest in VFTSX through their Defined Contribution plan beginning in May 2018.
  
# # #

Pension Fund Earned $254.8 million in January - Outperformed Investment Benchmarks

February 28, 2018: Rhode Island's pension fund continued to deliver strong performance in January, earning $254.8 million, and outperforming the plan's investment benchmark, as well as a standard 60% global equity / 40% fixed income benchmark.

"Rhode Island's pension fund continues to grow stronger and healthier," said Rhode Island Treasurer Seth Magaziner. "Our 'Back to Basics' investment strategy is designed to deliver strong performance over the long term, ensuring retirement security for those who are in the pension system and benefitting all Rhode Island taxpayers."

For the month of January 2018, the fund earned 3.03 percent net of fees, outperforming the 2.95 percent performance of the plan's investment benchmark, as well as the the 2.92 percent return of a standard 60% global equity / 40% fixed income benchmark.

You can read the press release here.

# # #

Treas. Magaziner to SEC: Student Loan Debt Crisis isn't “Ordinary Business”

February 16, 2018: Rhode Island Treasurer Seth Magaziner yesterday sent a letter to the U.S. Securities and Exchange Commission, in response to Navient Corporation’s (NASDAQ: NAVI) attempt to deny shareholders the chance to vote on his proposal requesting that the company provide investors with information on the measures it is taking related to risks associated with the student loan debt crisis.

“Shareholders have good reason to be concerned about risks associated with the student loan industry,” said Treasurer Magaziner. “Nationally, there are more than 44 million borrowers with an estimated $1.5 trillion in student loan debt, an amount second only to mortgage debt.” 
 
Navient, which is facing lawsuits by four states and the Consumer Financial Protection Bureau, as well as a class-action lawsuit from investors, has appealed to the U.S. Securities and Exchange Commission (SEC) for permission to deny shareholders a chance to vote on the shareholder proposal submitted by Treasurer Magaziner. Navient is claiming that the growing level of unsustainable student loan debt, and the risk the company is taking on, is “ordinary business”.

You can read the entire press release here.

# # #

Members of 52 MERS Plans will Receive a COLA in 2018

Members of fifty-two municipal (MERS) pension plans will receive cost-of-living adjustments (COLA) in 2018. All members of these 52 plans who retired before June 30, 2012 and were previously receiving or eligible for a COLA - will receive a COLA beginning the month following their retirement date in 2018. Click here for a list of the MERS plans providing a COLA in 2018.

General MERS members of these MERS plans who retired after June 30, 2012 – will be eligible to receive a COLA three years after your retirement date or at their Social Security Normal Retirement Age, whichever is later. Police and Fire MERS members of these plans who retired between July 1, 2012 and June 30, 2015 – will be eligible to receive a COLA three years after their retirement date or when they reach age 55, whichever is later. Police and Fire MERS members of these plans who retired after June 30, 2015 - will be eligible to receive a COLA three years after their retirement date or when they reach age 50, whichever is later.
 
Teachers’ Survivor Benefits:  Current eligible beneficiaries of the Teachers’ Survivor Benefit receive the same COLA granted to members of Social Security. The increase, which begins in January 2018, is 2.0% as announced by the Social Security Administration in October 2017.

How is the COLA calculated?: Eligible retirees of the 52 MERS plans will see an increase of 1.51% on the first $26,291 of their annual pension benefit for calendar year 2018. The Teachers’ Survivor Benefits plan COLA is determined by the Social Security Administration.
 
How is it determined which plans get COLAs and which plans do not?: Municipal plans that are part of MERS, and have adopted a COLA provision, provide a 2018 COLA when the actuary determines the individual plan is at least 80% funded as of June 30, 2017. Plans that have chosen not to offer a COLA and plans that are not 80% funded do not provide a COLA to members.

Recipients of the Teachers' Survivor Benefit (TSB) will receive COLA as determined by the Social Security Administration.  NOTE: There may be years that the Social Security Administration does not grant a COLA.   

A handout with this information can be downloaded here.

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Treasurer Magaziner Tells Opioid Distributor to Come Clean on Lobbyists

January 31, 2018: State Treasurer Seth Magaziner today announced that the Rhode Island pension fund has co-filed a shareholder proposal at McKesson Corporation (NYSE: MCK), one of the largest pharmaceutical distributors in the United States, requesting full disclosure of the pharmaceutical giant's direct and indirect lobbying activities and expenditures - to assess whether McKesson's lobbying is consistent with its expressed goals and in the best interests of stockholders.

"As investors, we have a right to know if pharmaceutical executives are using our money to influence lawmakers," said Treasurer Magaziner. "I am particularly concerned with the possibility that McKesson is using investors' dollars to block common-sense public health policies related to the opioid epidemic."

You can read the entire press release here.

# # #

R.I. Pension Fund Earned $1.1 Billion in 2017

January 24, 2018: Rhode Island's pension fund earned more than $1.09 billion from investments in 2017 bringing the fund's value to $8,420,929,978, the highest in more than a decade.

"In 2017 we took our investment strategy Back to Basics and delivered strong returns that are helping the pension fund get stronger," said Treasurer Magaziner.

The fund earned 1.10 percent in the month of December 2017, bringing its 12-month performance to 14.48 percent, outperforming the plan's own benchmark of 14.39 percent for the same period.

As of December 31, the Rhode Island pension fund outperformed its annual 7 percent average investment target over the past 1, 3 and 5 years.

Treasurer Magaziner announced the Back to Basics investment strategy in September 2016. In that time, the fund has exited seven hedge funds, reallocating $500 million into more traditional investments.

Detailed information about the fund is published online as part of Treasurer Magaziner's 'Transparent Treasury' initiative at: investments.treasury.ri.gov

# # #

Treasurer Magaziner, National Coalition Win Opioid Transparency Ruling from SEC

January 22, 2018: Rhode Island Treasurer Seth Magaziner and the national coalition Investors for Opioid Accountability have thwarted an attempt by pharmaceutical distributor AmerisourceBergen to deny shareholders' efforts to obtain information about the company's response to the U.S opioid crisis.

"Opioid-related deaths in Rhode Island are a public health epidemic. The State and federal government must work together with the non-profit and the private sectors to curb opioid misuse and abuse," said Treasurer Magaziner. "The pharmaceutical industry bears tremendous responsibility and must act to address this crisis."

Shareholders are also requesting information on whether AmerisourceBergen's board has clawed back compensation from any senior executive due to misconduct. 

The AmerisourceBergen proposals were filed by fellow members of Investors for Opioid Accountability (IOA), an investor coalition that was established out of growing concerns that opioid risks may threaten shareholder value and have profound long-term implications for the economy and society.

AmerisourceBergen appealed to the U.S. Securities and Exchange Commission (SEC) seeking to deny investors the opportunity to weigh-in on the issue. The SEC denied AmerisourceBergen's appeals, allowing shareholders to consider the proposals later this year.

"By denying AmerisourceBergen's attempt to stonewall concerned investors, the SEC has recognized that the opioid epidemic is a significant policy issue with a real impact on investors," said Treasurer Magaziner.

AmerisourceBergen, the nation's third largest drug distributor, paid $16 million in March 2017 to settle a lawsuit brought by West Virginia for allegedly contributing to the overdose crisis in that state.

# # #

ERSRI Begins Mailing 2017 1099-R Forms to Retirees

January 17, 2018: ERSRI began mailing 1099-R forms to retirees on January 12, 2017 - with all 1099s expected to be mailed by January 31st. Retirees should receive their 1099-R forms by mid-February, at the latest.

Retirees can view and download their 1099-R by logging into their account. Information on how to access you 1099-R online can be found here.

For information about how to read the 1099-R please click here.

If you turned 59 ½ in 2017, you may receive two separate 1099-R forms. You can read more information by clicking here.

If you do not receive your 1099-R form by mid-February, please call (401) 462-7600 and we will issue a replacement.

#  # #


R.I. State Pension Fund Earns $101.3 million in November

December 21, 2017: Rhode Island's pension fund continues to deliver strong performance, earning $101.3 million in November, which brings investment earnings over the past 12-months to $1.1 billion, and the fund's value to a decade-high $8.34 billion.

"The health of Rhode Island's pension fund is improving," said Treasurer Magaziner. "Over the past year, our Back to Basics approach of common sense investing has been providing solid investment returns for our members."

In the past 12 months, the pension fund has earned 14.77 percent on its investment, and 1.23 percent in the month of November. The November returns beat the fund's benchmark of 1.21 percent and a traditional 60% stock/40% bonds portfolio which would have earned 1.11 percent.

Treasurer Magaziner announced the Back to Basics investment strategy in September 2016. In that time, the fund has exited seven hedge funds, reallocating $500 million into more traditional investments for growth and stability.

Detailed information about the fund's investment strategy, performance and managers are published online as part of Treasurer Magaziner's 'Transparent Treasury' initiative at: investments.treasury.ri.gov.

# # #

Compass, ERSRI’s Member Newsletter, is Available Online

November 28, 2017: The Fall/Winter 2017 issue of Compass, ERSRI’s member newsletter, is now available. Articles include:

  

   Message from Treasurer Magaziner
   Retirement System Update
   2017 Legislative Update
   DOA’s Voluntary Retirement Incentive Information
   Protecting Your Identity
   Member Profile: Meet Michael Allen


 

# # #
 

Retirement System Advises Members to Prepare for Delays Due to Voluntary Retirement Incentive

November 3, 2017: Members of the Employees’ Retirement System of Rhode Island should be prepared to experience delays in retirement application processing and member service inquiries in coming months as the voluntary retirement incentive is expected to generate a high volume of inquiries and retirement applications in a short period of time.

Members are reminded that the voluntary retirement incentive is not a Retirement System initiative. The Department of Administration (DOA) will be contacting employees that may qualify for the incentive directly. Questions about DOA notifications should be made to Human Resources, not the Retirement System.

ERSRI will be validating retirement eligibility and providing pension benefit estimates to employees who have received an incentive packet from DOA. To expedite responses, ERSRI is asking members who have been notified by the Department of Administration that they are qualify for the voluntary retirement incentive to submit all retirement related inquiries and applications online via: www.ersri.org/vri

The Employees' Retirement System is committed to providing its members with timely, quality services and will make every effort to keep delays in processing to a minimum. ERSRI does not anticipate any delay in pension payroll or other functions that are not related to new retirement applications.

# # #

Treasurer Magaziner Joins Investor Coalition Demanding Opioid Distributors and Manufacturers Examine Their Role in Overdose Crisis

October 30, 2017: Rhode Island Treasurer Seth Magaziner has joined a coalition of 30 treasurers, asset managers, faith-based investors, public and labor funds with a combined $1.3 trillion in assets under management in engaging with companies on board oversight of business risks related to opioids at ten opioid distributor and manufacturer companies.

The devastating increase of opioid-related deaths in Rhode Island requires that state, federal, non-profit and the private sector all work together to curb opioid misuse and abuse. The pharmaceutical industry must do more to end this epidemic - not profit from it,” said Rhode Island Treasurer Seth Magaziner.

You can read the entire press release here.

# # #
 

Rhode Island Pension Fund Earns $872 Million in First Year of Treasurer Magaziner's 'Back to Basics' Strategy 

October 25, 2017: Rhode Island's pension fund continues to deliver strong investment performance, earning $74.3 million in the month of September 2017, and more than $872 million in the 12 months since Treasurer Magaziner announced his Back to Basics investment strategy.
"I am committed to bringing growth and stability to our State's pension fund," said Treasurer Magaziner. "Our Back to Basics approach is improving investment returns through common sense investments and providing financial security for those who have dedicated their careers to public service."

For the 12-month period ending September 30, 2017, the fund earned over $872 million, a return of 11.6 percent, which beats the plan's 11.1 percent benchmark and a traditional 60% stock/40% bonds portfolio which would have earned 10.9 percent.

Treasurer Magaziner announced the Back to Basics investment strategy in September 2016 and has moved more than $500 million out of hedge funds in favor of more traditional investments for growth and stability.

Detailed information about the fund's investment strategy, performance and managers are published online as part of Treasurer Magaziner's 'Transparent Treasury' initiative at: investments.treasury.ri.gov.

# # #

Governor Raimondo Announces Retirement Incentive for Eligible State Employees - Details to Follow by November 1st

October 9, 2017: On October 6th, the Raimondo Administration announced an incentive for State employees who are eligible for retirement this year. The incentive consists of a one-time payment equal to twice the value of the eligible employee’s annual longevity bonus dollar amount, with a total cap of $40,000.  This is not an early retirement incentive. The incentive will be available to members with a normal retirement eligibility date occurring before December 31, 2017.
 
The Department of Administration will provide more detailed information about this incentive prior to November 1st.  ERSRI will provides updates, as available, at www.ersri.org.
 
Longevity payment details for State employees are maintained by employers and not by ERSRI. If you believe you may be eligible or have questions about the incentive, we respectfully request that you do not contact ERSRI or your Human Resources representative until the Department of Administration releases additional information.

If you are considering retirement, have not received a retirement packet within the past 12 months, and would like to receive information on your eligibility and estimated pension benefit amount, please complete, sign and return this form to ERSRI.
 
Note: Rhode Island State Police and Department of Corrections officers are not eligible for the incentive due to differing retirement arrangements.

# # #

Rhode Island Pension Fund Has Pulled More than $500 Million from Hedge Funds

October 3, 2017: Rhode Island General Treasurer Seth Magaziner today announced his office’s redemption from seven hedge funds has topped $500 million as the implementation the Treasurer’s Back to Basics investment strategy reaches the one-year milestone.

"My Back to Basics strategy is getting the pension system healthy in order to provide retirement security for those who have dedicated their careers to public service and bring more stability to Rhode Island’s finances,” said Treasurer Magaziner.

Since October 2016, the Treasurer’s office redeemed positions with Ascend Capital, Brevan Howard, Brigade Capital Management, Emerging Sovereign Group, Partner Fund Management, Samlyn Capital, and Och-Ziff management.

The move away from hedge-funds was a part of Magaziner’s Back to Basics investment policy which found that high-fee hedge funds had underperformed, despite commanding high fees. Under Back to Basics, most of the state’s previous hedge fund investments were abandoned in favor of more traditional investment strategies.

The $8.17 billion Rhode Island Pension Fund has earned more than $840,000,000 in investment gains in the 12-month period ending August 31, 2017. This 11.27% return beat the plan’s own benchmark of 10.95%, and outperforms a traditional 60% stock/40% bonds which would have returned 10.21% over the same period.

# # #

Rhode Island Pension Fund Earns $64 Million in August

September 27, 2017: Rhode Island's pension fund continues to deliver positive investment performance under Treasurer Magaziner's Back to Basics strategy earning $64.2 million in investment gains in the month of August which brings the fund's value to $8.17 billion.
"Our Back to Basics investment strategy continues to deliver positive performance for retirees and taxpayers," said Treasurer Magaziner. "I am committed to strengthening the state's finances for all Rhode Islanders and that includes bringing added stability to the state's pension fund."

The fund earned 0.79% net of fees in the month of August 2017, outperforming its own 0.77% benchmark and beating a traditional 60% stock/40% bonds portfolio which would have only delivered a 0.58% return. Similarly, the fund's 1-year return (for the 12 month period ending on August 31, 2017) is 11.27%, beating the plan's benchmark which stands at 10.95% and - beating by more than 1% - a 60%/40% portfolio, which would have returned 10.21%.

Treasurer Magaziner announced the Back to Basics investment strategy in September 2016, which moves the state out of most hedge funds and into more traditional investments that are designed to grow when markets are up and provide stability when markets are down.

Detailed information about the fund's investment strategy, performance and managers are published online as part of Treasurer Magaziner's 'Transparent Treasury' initiative at: investments.treasury.ri.gov.

# # #

Treasurer Magaziner's "Transparent Treasury" Policy to Become Law

September 20, 2017: Rhode Island Treasurer Seth Magaziner today applauded the General Assembly's passage of legislation which will create a legal requirement to maintain the "Transparent Treasury" investment policy he implemented just months after taking office in 2015, which requires investment managers to publicly report fees and performance.

"Transparency is essential to good government," said Treasurer Magaziner. "As Treasurer, I take the seriously my obligation to set a high standard of reporting that publicly discloses investment performance and fees. I commend the General Assembly for codifying my "Transparent Treasury" policy, which will now be in place beyond my administration."

You can read the press release here.

# # #

Treasurer Magaziner Releases Overview of Pension Fund’s 2017 Shareholder Engagement


August 17, 2017: Treasurer Seth Magaziner today released an overview of the State’s shareholder engagement activities during the past shareholder season, which includes actions to encourage gender and ethnic diversity on corporate boards, protect consumers from fraud and predatory lending practices, and push energy companies to disclose the amount of shareholder money spent on lobbying efforts at all levels of government.

"As investors, we are pushing companies to make responsible decisions that consider the long-term future of their company so that it is sustainable for years to come,” said Treasurer Magaziner. “This year we continued to push for diversity among corporate board members; engaged with Wells Fargo after their massive consumer fraud affected millions of Americans; fought to uphold consumer’s rights to have their student loan debt restructured to fit their income; and told energy companies to ‘come clean’ about practices aimed at influencing lawmakers who are tasked with regulating their industry.”

You can read the entire press release here.

# # #
 

Summer 2017 Issue of Compass, ERSRI's Member Newsletter, is Available Online

Articles include:

  •  Message from Treasurer Magaziner
  •  Highlights from Treasury’s 2016 Annual Report
  •  Richard Garland named Financial Educator of the Year
  •  ERSRI’s Asst. Dir. Diane Bourne retires, Kate Brock assumes role
  •  Stay in-the-know with emails from ERSRI
  •  ERSRI membership by the numbers


You can read the issue by clicking here.




Pension Fund Continues to Rally, Earns $137 Million in July

August 23, 2017: After posting an 11.62% return in the fiscal year ending on June 30, 2017, the Rhode Island Pension Fund has continued to deliver under Treasurer Magaziner and his Back to Basics investment strategy earning 1.70% in the month of July which brings its total value to $8.15 billion.

"We are committed to strengthening the retirement system and providing retirement security for its members,” said Treasurer Magaziner. “The Back to Basics investment strategy continues to provide growth when markets are strong, and is also positioning us to be more stable when markets are down."

The $137 million earned in July marks the ninth consecutive month of gains for the fund, which continues to outperform its own internal benchmark and a traditional 60% stock/40% bonds portfolio over the past one-year, three-year and five-year time periods.

Treasurer Magaziner announced a new “Back to Basics” investment strategy in September 2016, which is expected to provide more long-term growth and market stability for the pension fund through traditional investment techniques and a reduction in hedge-funds.

More information is available at http://investments.treasury.ri.gov/


# # #
 

When Will I Receive My COLA?

July 31, 2017: Most retirees will receive Cost of Living Adjustments (COLAs) in 2017. The COLA is a permanent increase in the amount of the pension benefit. Most members will see the increase in the month after their retirement date.

(For example, if a member retired in the month of May, he or she will likely see their benefit level increase to reflect the COLA beginning in June.)

The Cost of Living Adjustment for this year is 0.74%. The size of the COLA is based on a formula tied to the Consumer Price Index and the investment performance of the pension fund.

For eligible retired state employees and teachers, as well as certain municipal employees, the 0.74% increase will be applied to the first $31,318 of pension benefit, resulting in an increase of up to $231.75 per year.

For other municipal retirees, the increase will be applied to the first $26,098 of pension benefit, resulting in an increase of up to $193.13 per year.

Notice to teachers: Many teachers retire following the school year with a June 30  effective termination date and a retirement date of July 1. This means that many retired teachers will begin receiving their 2017 COLAs in August.

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R.I. Pension Fund Earns $851 Million in Fiscal 2017, Outperforms Benchmark with 11.6% Return

July 26, 2017: General Treasurer Seth Magaziner today announced that Rhode Island's pension fund earned 11.62% outperforming the plan's benchmark and growing to $8,041,060,035 in the fiscal year ending on June 30.

"Our 'Back to Basics' investment approach is improving investments returns for the fund," said Treasurer Magaziner. "My office will continue to work on strengthening retirement security for our public employees."
 

The pension fund earned $851,428,237 in fiscal 2017. Net investment performance was 11.62%, beating both the 11.34% return of the fund's benchmark, as well as the 10.80% return for a traditional 60% stock / 40% bond investment portfolio.
 

Rhode Island's net investment performance also outperformed its benchmark for the one, three, five and ten year periods ending June 30, 2017.
 

In September 2016, Treasurer Magaziner announced a "Back to Basics" investment strategy for the Rhode Island pension fund, which includes a significant reduction in the State's investments in hedge funds.
 

 

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Treasurer Magaziner's HELP Act Receives Broad Support at House Hearing

June 15, 2017: Stakeholders, members of the business community, and government officials from across Rhode Island testified in support of General Treasurer Seth Magaziner's Healthy Local Pensions (HELP) Act before the House Finance Committee yesterday. The legislation (H 6030) will make it easier for cities and towns with locally administered pension plans to join the state run Municipal Employees' Retirement System (MERS).

"Too many locally-managed municipal pension plans in Rhode Island remain critically underfunded, threatening the retirement security of employees who have spent a career in public service," said Treasurer Magaziner. "This common-sense proposal provides a new tool for those municipalities to get their pension plans back on track if they choose to do so."

The process by which municipal plans can enter MERS is antiquated and unnecessarily rigid. The HELP Act will, in part, update the process to make it more manageable by extending the length of time cities and towns can take to fully-fund their pension plans.

You can read the entire press release here.

Treasurer Magaziner Calls on Congress to Protect Shareholder Rights

June 12, 2017: Rhode Island General Treasurer Seth Magaziner joined a group of treasurers and investors in sending a joint statement to Congress opposing the "Financial CHOICE Act" which drastically reduces corporate accountability and denies all but the wealthiest shareholders the ability to influence company policies.

"This legislation would remove a critical tool that we use to keep corporations accountable to their shareholders and prevent the kind of mismanagement that led to the global financial crisis in 2008," said Treasurer Magaziner. "Too many Rhode Islanders have suffered due to irresponsible financial practices and a lack of corporate oversight. We cannot allow big corporations to repeat the mistakes of the past."

The Act makes it impossible for all but the wealthiest shareholders to submit proposals at a company's annual meetings. Shareholder engagement strengthens oversight of companies, allowing every day investors, like the public employees served by the Rhode Island pension system, to have a voice at the table and hold management and boards accountable.

You can read the entire press release here.

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Treasurer Magaziner Presses Energy Companies to "Come Clean" on Lobbying, Climate Policies

June 7, 2017: Rhode Island General Treasurer Seth Magaziner is joining shareholders across the country in demanding that energy companies disclose information about climate change policies, risks and lobbying expenses.

"As the Ocean State, Rhode Island has a critical interest in the sustainability of our environment. We are sending the message to companies in which we invest that we are still in the fight to address the global climate crisis and that we expect them to adopt responsible, sustainable practices" said Treasurer Magaziner.

You can read the entire press release here.

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Treasurer Magaziner Votes Against Excessive Pay for Corporate Executives

May 25, 2017: During the ongoing 2017 shareholder season the Rhode Island pension fund will vote "no" on management-backed compensation plans for executives at publicly traded companies including Wal-Mart, American Express, Charter Communications, and pipeline builder NuStar Energy.

"My job as Treasurer is to deliver strong financial performance for of our state's $8 billion pension fund.  Rewarding executives with excessive salaries and bonuses goes against the interest of the fund and the public whom we serve,” said Treasurer Magaziner. “Executive compensation should be transparent and based on performance.”

The “no” votes are in response to a fundamental misalignment between executive pay and company performance or because the pay packages are excessive or otherwise inappropriate.

You can read the entire press release here.

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Rhode Island Pension Fund Earns $79 million in April

May 24, 2017: The Rhode Island Pension Fund continued its recent strong performance in the month of April earning $79 million from investment gains Rhode Island General Treasurer Seth Magaziner today told members of the State Investment Commission.

"We are implementing our "Back-to-Basics" investment strategy which is designed to provide more growth and greater stability through more traditional investments," said Treasurer Magaziner. "Since we adopted "Back-to-Basics" we have seen consistent gains and are ahead of schedule in the move away from hedge funds."

"Staying focused on long-term growth and stability will help us restore the health of our pension system and ensure that we never have to go through another painful pension reform like the one in 2011," continued Treasurer Magaziner.

With just two months remaining in the fiscal year, the fund has returned 9.8 percent in the ten months since July 1, 2016, beating its own benchmark of 9.5 percent and a 60% stock/40% bond portfolio which would have earned 8.8 percent.

All performance reported is net of fees. Detailed information about the fund's investment strategy, performance and managers can be found online at: investments.treasury.ri.gov

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Providence Journal Op-Ed: Rhode Island Must Address Sick Pension Plans

On April 2, 2017, The Providence Journal published an Op-Ed by Treasurer Magaziner about how to help cities and towns with locally administered pension systems improve performance and reduce costs through the state’s Municipal Employees’ Retirement System (MERS).

The piece reads, in part: "...By far the biggest financial challenge Rhode Island faces today is the condition of our municipal pension plans. It’s hard to believe, given the small size of our state, but Rhode Island has 150 municipal pension plans. These plans provide retirement security for the hard-working municipal employees who devote their careers to serving our local communities. These employees, and the taxpayers they serve, deserve to have pension plans that are healthy and sustainable."

You can read the complete Op-Ed here.

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Treasurer Magaziner Votes Against Wells Fargo Board, Following Massive Fraud


April 24, 2017: Rhode Island General Treasurer Seth Magaziner has joined shareholders from across the country by voting against all sitting independent directors at Wells Fargo, following the massive fraud perpetrated against their customers. The Rhode Island pension fund currently owns 139,256 shares of Wells Fargo (NYSE: WFC).

"Over the course of many years, the board of directors at Wells Fargo failed to provide adequate oversight of the company, including its illegal sales practices," said Treasurer Magaziner. "Millions of Wells Fargo customers were harmed while the board abdicated their oversight authority - all while being compensated with shareholder's money. I cannot in good faith reward their indifference by voting to approve their continued tenure on the Wells Fargo board."

You can read the entire press release here.

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Treasurer Magaziner Announces Plan to Strengthen Municipal Pension Systems

March 30, 2017: Continuing his commitment to bring a steady hand to public finances throughout the state, Rhode Island General Treasurer Seth Magaziner today announced the “Healthy Local Pensions (HELP)” proposal, which will help cities and towns with locally administered pension systems improve performance and reduce costs through the state’s Municipal Employees’ Retirement System (MERS).

More than 75% of the municipal pension plans in Rhode Island are already in the state-run MERS system. Due to the size of the state pension system, municipal plans in MERS enjoy a healthy funding status, stronger investment performance and lower costs than most smaller locally-managed plans are able to achieve on their own. While the 116 municipal plan in the state system have an average funded status of 83%, the pension plans that remain locally administered carry a combined $2.4 billion unfunded liability. Of the 34 locally administered plans, 19 are below 60% funded and 12 are below 40%.

 You can read the press release here.

Rhode Island Treasury Releases 2016 Annual Report

March 2017: General Treasurer Seth Magaziner released Rhode Island Treasury's 2016 Annual Report, which contains highlights from the past year, including more than $500 million in investment gains, the Treasurer's new 'Back to Basics' investment strategy, turnaround of the state's CollegeBound program, and a roundup of progress made in programs throughout Treasury.

The report can be downloaded at www.treasury.ri.gov/annualreport.

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Rhode Island Pension Fund Continues Strong Run, Earns $58.4 Million in March

April 26, 2017: Six months after announcing its ‘Back to Basics’ investment strategy, Rhode Island’s pension fund continued its strong run, returning 0.75% in March despite flat performance in the US stock market, General Treasurer Seth Magaziner announced at today’s meeting of the State Investment Commission.

"We designed our investment portfolio to provide long-term growth and less risk,” said Treasurer Magaziner. “As we are in the process of moving away from hedge funds and into more traditional investments, it is encouraging to see the pension system beat the US stock market and continue to grow healthier and more secure.

International stocks were the fund’s top performers earning 2.53% on the month, while US stocks experienced a mid-month dip before ending with only a 0.06% increase. With three months remaining in the fiscal year, the fund has earned 8.76% in just nine months, beating its own benchmark of 8.31% and a 60% stock/40% bonds portfolio which would have earned 7.43%

In 2016, the State Investment Commission approved Treasurer Magaziner’s ‘Back to Basics’ investment strategy, which is designed to strengthen performance and reduce risk. Included in ‘Back to Basics’ is the move to exit most of the state’s investments in hedge funds in favor of more traditional strategies for growth and stability.

 All performance reported is net of fees. Detailed information about the fund’s investment strategy, performance and managers can be found online at: investments.treasury.ri.gov
 

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12-Month Investment Gain Tops $1 Billion as RI Pension Fund Earns $128M in February

March 22, 2017: Rhode Island’s pension fund earned $128 million in investment gains in February 2017 bringing its 12-month investment earnings over the $1 billion mark, General Treasurer Seth Magaziner announced at today’s meeting of the State Investment Commission.

Returning 1.7% in the month of February, the fund’s market value grew to $7.9 billion. Over the past 12 months, the fund has earned a 14.4% return, outperforming the plan’s own 13.9% benchmark, as well as a traditional 60% stock/40% bond portfolio which would have returned 13.5%.

You can read the press release here.

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Winter 2017 Issue of Compass, ERSRI's Member Newsletter, is Available Online

February 8, 2017:  You can read the Winter 2017 issue of Compass by clicking here. Articles include:

  • Message from Treasurer Seth Magaziner
  • 2017 Pension Payroll Calendar
  • 2017 Cost of Living Adjustment Details and Eligibility
  • Update on Pension Fund Investment Performance
  • Understanding your 1099-R tax form for 2016
  • Member Profile: Carol Keiser

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RI State Pension System Earned More than $500M in 2016

January 25, 2017: The state's pension fund earned more than $530 million in investment gains in 2016, the most in the past three years, General Treasurer Seth Magaziner told members of the State Investment Commission at their monthly meeting this morning. The state's 7.4% net return beat its internal benchmark of 6.3% and a traditional 60% stock, 40% bond portfolio which would have returned 5.9% last year.

You can read the press release here.

You can learn more about where the state’s pension funds are invested, how they are performing, and an overview of the state’s investment strategy and philosophies at the State Investment Information Center

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RI Pension Fund Earns $117M from Investments in January 2017

February 22, 2017:  Rhode Island’s pension fund earned $117 million in investment gains in January 2017, General Treasurer Seth Magaziner announced at today’s meeting of the State Investment Commission.

Returning 1.6% in the month of January, the fund’s market value grew to $7.8 billion, the highest in more than a year. The fund has earned more than $875 million from investments over the past 12 months, a return of 12.4%, which beats the plan’s own 11.6% benchmark and a traditional 60% stock/40% bond portfolio which would have returned 11.2%.

You can read the press release here.

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ERSRI to Begin Mailing 1099-R Forms in Mid-January

January 6, 2017: ERSRI will be mailing 1099-R forms to retirees beginning in mid-January - with all 1099s mailed by January 31st. Retirees should receive their 1099-R forms by mid-February, at the latest.

Retirees can view and download their 1099-R by logging into their account. 

For information about how to read your 1099-R please click here

If you turned 59 ½ in 2016, you may receive two separate 1099-R forms. You can read more information by clicking here.

If you do not receive your 1099-R form by mid-February, please call (401) 462-7600 and we will issue a replacement.

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Notice of Proposed Rulemaking

Amendments were made to Chapter 10 Sections 1.1 and 9.1 to add revisions, clarifying language, and additional subsections (previously Regulations 1 and 9) and technical changes were made throughout. Download the full notice here.
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Marcia Reback to Join ERSRI’s Retirement Board

December 29, 2016: Ms. Marcia B. Reback will join Employees' Retirement System of Rhode Island’s (ERSRI) 15-member Retirement Board, as a Retiree Member Representative, beginning with the Board’s January 11, 2017 meeting.

In November 2016, ERSRI notified members that there was an open Retiree Member Representative position on the Retirement Board. All retiree members of the retirement system were eligible to be a candidate for the seat. Interested members were required to obtain a minimum of 100 valid signatures from eligible retiree members, and return their nomination papers to the Retirement Office in order to qualify for nomination. 

Ms. Reback was the sole member to return valid nomination papers by the 4:00 p.m. December 12, 2016 deadline. As such, she will take the oath of office at the outset of the Retirement Board ‘s next meeting, which will take place on January 11, 2017 at 9:00 a.m. in the 2nd Floor Conference Room of 50 Service Avenue in Warwick, RI.

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Fall 2016 Issue of Compass, ERSRI's Member Newsletter, is Available Online

You can read the issue by clicking here. Articles include:

  • Treasurer Magaziner on ‘Back to Basics’ Approach to Pension Fund Investments
  • Legislative Update for ERSRI Members
  • Update on Pension Fund Investment Performance
  • A Letter from Marcia Reback & Roger Boudreau
  • TIAA Offers Free Financial Advice for Members
  • Post-Retirement Employment Q&A with Frank Karpinski

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ERSRI Customer Service Survey

November 14, 2016: You may have recently received an e-mail from ERSRI asking you to complete a brief survey to determine how members evaluate the quality of services provided.  The surevey will take between 12-14 minutes and your answers will be useful as decisions are made to improve services.  All of your answers will be kept confidential.

Your participation in this survey is voluntary. Your decision to participate or not participate will have no effect on your rights or benefits.

if you have questions, please contact ERSRI at 401-462-7600. The ERSRI Customer Service Center is open Monday - Friday from 8:30 a.m. until 4:00 p.m.

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Rhode Island State Investment Commission Approves Hedge Fund Redemption

October 26, 2016: The State Investment Commission today unanimously voted to terminate its investment in seven hedge funds pursuant to the newly adopted 'Back to Basics' investment strategy, announced General Treasurer Seth Magaziner, who chairs the Commission. With today's action, Rhode Island will redeem an estimated $585 million from hedge funds in the coming months. You can learn more here.

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Treasurer Magaziner Announces 'Back to Basics' Plan to Strengthen Pension Fund

September 28, 2016: General Treasurer Seth Magaziner announced today a new "Back to Basics" investment strategy for the Rhode Island pension fund, following unanimous approval by the State Investment Commission.

Among the changes that were recommended by Treasurer Magaziner is a significant reduction in the state's investments in hedge funds. Under the "Back to Basics" plan, the state will reduce its investment in hedge fund strategies by more than $500 million over the next two years, and reallocate these funds to more traditional asset classes.

You can learn more about the plan here.

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ERSRI Retirees to Receive $500 Stipend

August 2, 2016: Members of Employees’ Retirement System of RI who retired on or before July 1, 2015 will receive a $500 stipend, which will be included in their August 29, 2016 pension payment. 


It is the second of two $500 stipends that were negotiated as part of The Rhode Island Retirement Security Act of 2011 (RIRSA) and the 2015 Settlement Agreement.

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R.I. Budget Includes New Tax Exemption for Retirees

July 5, 2016: Rhode Island’s 2017 fiscal year budget, which took effect on July 1, 2016, includes a new tax exemption for qualified retirees.

The first $15,000 of retirement income will be exempt from state personal income tax for retirees who have reached full social security retirement age and have a gross income of $80,000 or less for single filers, or $100,000 in gross income for joint filers.

In the 2016 budget, the Rhode Island General Assembly passed a similar initiative that provided a tax exemption only for Social Security benefits. This year’s budget also includes an exemption for other types of retirement income, including public and private pensions. The exemption is expected to provide over $6 million in tax relief in 2017 and nearly $14 million in tax relief in 2018, reducing the tax burden for over 60,000 Rhode Island taxpayers.

On behalf of the members of the Employees’ Retirement System of Rhode Island, Treasurer Magaziner commends House Speaker Mattiello, Senate President Paiva Weed and the members of the General Assembly for their leadership on this initiative.

You can read more about Rhode Island’s 2017 budget here.

DISCLAIMER: This information is not intended to provide legal or accounting advice. Please consult a tax advisor for information on your specific situation.