Improving returns is just part of SC Retirement System fix

At the Retirement System Investment Commission, we believe that we exist for the sole purpose of helping to fulfill the sacred promise the state has made to our members — 500,000 teachers, firefighters, police officers, state and local employees, retirees and families.

Our job is to invest and manage the assets of the state’s five retirement systems, but we don’t think of the trust fund we manage as simply a multi-billion dollar, globally diversified investment portfolio.

__________

SC lawmakers to tackle troubled state retirement system

Our legislators’ special pension perk

__________

We see it as the tangible benefits it provides to our members like food, medicine, clothing and even presents for grandchildren.

Our organization has received a great deal of criticism for our investment performance over the past several years, and quite frankly deservedly so: We have underperformed our peers and the state’s expected rate of investment return.

So we have spent the greater part of this past fiscal year undertaking a deep and systemic review of ourselves and our performance.

We have challenged our investment beliefs and subjected our investment portfolio to a top-to-bottom review.

We have renewed our focus on asset allocation, or how we divide our portfolio into different types of investments, taking a zero-based budgeting approach to our allocations. Each type of investment class has been subjected to scrutiny and required to prove its place in the portfolio.

As a result, we adopted a new asset allocation that took effect on July 1, and to date, we are pleased with the returns.

We know it will take time to fully see the results, but we believe these changes will provide the best opportunity to perform better relative to our peers and to the state’s assumed rate of investment return.

We are excited about the direction we have set and confident that we are on the right path to fulfilling our part of the promise of a safe and secure financial future for our members.

But there is no doubt that the fiscal condition of our state retirement plan presents a significant financial headwind for our state.

As we have taken a long hard look at ourselves, we have come to understand not only the part that investment returns have played in producing that headwind, but also the part that other components of the plan have contributed as well.

We understand that no one part of the plan has gotten us to where we are by itself, and we believe there is little benefit in dwelling on past decisions that cannot be changed.

We believe there is much greater value in looking to the future and working together to develop a permanent solution.

We are greatly encouraged by the efforts of Senate President Pro Tempore Hugh Leatherman and House Speaker Jay Lucas in putting together a joint committee charged with developing a pension-reform proposal to ensure the fiscal health and sustainability of the plan.

We are working diligently with the members of this committee, our trustees and our stakeholders, and applying the same level of passion to helping them develop a fix for the entire plan that we did in establishing a new direction for the investment portfolio.

For so many of our fellow South Carolinians, the task is far too important to do otherwise.

This story was originally published November 27, 2016 at 6:00 PM with the headline "Improving returns is just part of SC Retirement System fix."