Treasurer announces significant improvement in financial condition of state pension fund
Rhode Island General Treasurer
Seth Magaziner announced the total unfunded liability of the Employees’
Retirement System of Rhode Island decreased by $408,597,654 in the fiscal year
ended June 30, 2021, and the funded status grew to 63.9%, the highest level
since 2008. This is the third year in a row that the unfunded liability has
decreased and represents the largest decline in a single year ever.
“My mission as Treasurer is to
support economic opportunity and financial stability in Rhode Island, including
by strengthening the pension fund that thousands of Rhode Island families rely
on for retirement security,” said General Treasurer Seth Magaziner. “Under our
'Back-to-Basics' Investment strategy, we have helped the pension system reach
new all-time highs, consistently outperforming other public pension
funds.”
During Fiscal Year 2021, the
pension system earned a 25.6% investment return and ended at an all-time high
of more than $10.3 billion in assets. The overall funded status of the pension
system, which includes plans for state employees, teachers, judges, state
police, and municipal employees, rose from 60.5% to 63.9%.
Among the 117 municipal plans
managed by the pension system, 37 are more than 100% funded (up from 30 last
year), and 81 are at least 80% funded (up from 76 last year).
Notably, under the system’s
actuarial practices, the value of assets used to calculate the funded status of
the pension system is based on a five-year average. If the actual market value
of the system’s assets as of June 30 was used, the funded status of the system
would be 70%.
In addition to the strong
performance of the previous fiscal year, the Rhode Island Pension Fund has
demonstrated continued the strong performance achieved so far in Fiscal Year 2022.
According to the InvMetrics Public DB Database, which tracks the performance of
597 public pension plans, Rhode Island outperformed 97% of plans in the first
quarter of Fiscal Year 2022 (from July 1 through September 30).
