This article was written by Joel Chernoff with reports from Douglas Appell, Mark Bruno, Barry Burr, Vince Calio, Doug Halonen, Emily Newman and Cecily O'Connor.
The South Carolina State Retirement System, Columbia, will be able to invest in international equities and private equity for the first time now that voters approved an amendment to the state constitution.
Reynolds Williams, chairman of the South Carolina Retirement System Investment Commission, which oversees the $26 billion pension fund, expects the fund will invest up to 20% of its assets in international stocks and 5% in private equity under a new asset allocation expected to be adopted this spring.
The South Carolina referendum was the most significant, but by no means the only, pension- or investment-related issue during the Nov. 7 elections. In Iowa, for example, Democratic Governor-elect Chet Culver ran on a platform encouraging the $20 billion Iowa Public Employees' Retirement System, Des Moines, to invest 1% of its total private equity allocation in in-state venture capital.
Meanwhile, Republican candidates in Illinois, Maryland, Massachusetts, New York and Oregon who favored, among other things, replacing public defined benefit plans with defined contribution plans, all lost. In Rhode Island, however, voters re-elected Republican Gov. Donald L. Carcieri, who said he would consider switching new public employees to a defined contribution plan.
The Democratic candidate for governor in Alaska, Tony Knowles, who favored reinstating the state's defined benefit system for new public employees, was defeated by Republican Sarah Palin. Sources said Ms. Palin is open to discussing the issue. Ms. Palin's press secretary, Curtis Smith, didn't return calls seeking comment.
The defined benefit vs. defined contribution debate was far more subdued this year than last.
"Broadly, my take is that voters have rejected candidates who ran on a platform of promoting privatization of pensions," said Daniel Pedrotty, counsel in the AFL-CIO Office of Investment, Washington, which strongly supports public defined benefit plans.
However, Daniel Clifton, executive director of American Shareholders Association, Washington, which advocates adoption of defined contribution plans, said: "There was a tidal wave against Republicans in general, which could have been more of an overwhelming factor than" the DB-vs.-DC issue.
Mr. Clifton said shifting to defined contribution systems is becoming a non-partisan issue, citing a proposal this summer by New Jersey Gov. Jon Corzine, a Democrat, to introduce a defined contribution plan for new employees.
"Elections are going to come and go, but the long-term trend is moving in this direction," he said.
Here's a rundown of state results.