STUMP » Articles » Rhode Island Pensions: Asset Trends » 6 April 2017, 05:57

As noted in the prior post, there are two state-level pension funds in the Public Plans Database for Rhode Island, the plan for state employees and the plan for municipal plans — it’s the second one that is involved in the proposed legislation.

Now, I can do my usual screenshots to post, but as I want to do comparisons/combinations of these plans, I’m drawing the info from the Public Plans Database, and doing my own graphs.

ASSET GROWTH

Before we get into the investment returns and allocations, let’s just look at the absolute amount of assets for the plans:

We see that the state ERS is about 5-7x the size of the Municipal plan. I wonder how large that bar could get if all the municipal plans were sucked up into it.

ASSET ALLOCATION

So, it seems that the ERS and Municipal Plan funds are supposedly commingled… but I noticed that while the exact same investment returns were being reported every year, the allocation by asset type was not. Now, this could be simply an error on the part of the Public Plans Database people.

Or it could be some playing around with numbers on Rhode Island’s parts.

Here is the Rhode Island ERS allocation, straight from the Public Plans Database:

And here are the difference in allocations (in percentage points) between the two plans:

The differences appear only from 2010-2012. When Rhode Island was running into trouble and doing a bunch of “reform”.

It could be just a matter of error in the database, or in the original reporting, or it may be something odd with respect to how these funds were managed over these years.

Let’s see how this compares to other pension plans:

Okay, so the allocation by broad asset types isn’t too different from the rest of the public plans space.

Still, the public plan space does have an awful lot of alternatives. I’m not happy about that.

INVESTMENT RETURNS

As I said, even though the allocations given in the PPD are different for the two plans over 2010-2012, they give me the exact same annual returns.

Here’s the annual return pattern from the PPD:

And here is my own graph, with averages from the PPD as well as my own calculations:

So… that’s the vaunted performance of the Rhode Island funds? Those 10-year average returns aren’t looking so hot.

Heck, let’s see where they fall in the histogram of plans for 10-year returns in 2015:

Mmmm. Yeah. That’s not good. Not as bad as South Carolina, but still pretty bad.

So, let us think.

The argument being made for the muni plans outside the state Municipal Fund to join is to improve returns and fund management. So far there’s not a huge amount of indication that the Rhode Island funds are all that great re: management.

Again, not particularly awful, but is it really all that attractive?

Especially if it will be difficult to get out of the fund once one joins?

Caveat emptor.

Spreadsheet used in above graphs.

Compilation of Rhode Island posts