Rhode Island Has Lost $372 Million As State Shifted Pension Cash to Wall Street

By David Sirota on August 28 2014 1:34 PM

As Rhode Island General Treasurer Gina Raimondo promotes her 2014 gubernatorial campaign, she touts her supposed success in putting her state’s pension fund on firmer financial ground. That message has helped Raimondo surge to a lead in the polls, as reported by WPRI. What she fails to mention, though, is that the returns from her investment strategy have been far less beneficial for state pensioners than for the Wall Street firms now managing a growing share of Rhode Island’s money.

According to four years’ worth of state financial records, Rhode Island’s pension system has delivered an average 12 percent return during Raimondo’s tenure as general treasurer. That rate of return significantly trails the median rate of return for pension systems of similarly size across the country, based on data provided to the International Business Times by the Wilshire Trust Universe Comparison Service. Meanwhile, the pension investment strategy that Raimondo began putting in place in 2011 has delivered big fees to Wall Street firms. The one-two punch of below-median returns and higher fees has cost Rhode Island taxpayers hundreds of millions of dollars, according to pension analysts.