Skip to main content
MENU
Subscribe
  • Sign Up Free
  • LOGIN
  • Subscribe
  • Topics
    • Alternatives
    • Artificial Intelligence
    • Consultants
    • Defined Contribution
    • ESG
    • ETFs
    • Face to Face
    • Hedge Funds
    • Industry Voices
    • Investing
    • Money Management
    • Partner Content
    • Pension Funds
    • Private Equity
    • Real Estate
    • Regulation
    • SECURE 2.0
    • Special Reports
    • Washington
    • White Papers
  • Rankings & Awards
    • 1,000 Largest Retirement Plans
    • Top-Performing Managers
    • Largest Money Managers
    • DC Money Managers
    • DC Record Keepers
    • Largest Hedge Fund Managers
    • World's Largest Retirement Funds
    • Best Places to Work in Money Management
    • Excellence & Innovation Awards
    • WPS Innovation Awards
    • Influential Women in Institutional Investing 2023
    • Eddy Awards
  • ETFs
    • Latest ETF News
    • Fund Screener
    • Education Center
    • Equities
    • Fixed Income
    • Commodities
    • Actively Managed
    • Alternatives
    • ESG Rated
  • ESG
    • Latest ESG News
    • The Institutional Investor’s Guide to ESG Investing
    • ESG Sustainability - Gaining Momentum
    • ESG Investing | Industry Brief
    • Innovation in ESG Investing
    • 2023 ESG Investing Conference
    • ESG Rated ETFs
    • Divestment Database
  • Defined Contribution
    • Latest DC News
    • The Plan Sponsor's Guide to Retirement Income
    • DC Money Manager Rankings
    • DC Record Keeper Rankings
    • Innovations in DC
    • DC Plan Design: Improving Participant Outcomes
    • 2023 Defined Contribution East Conference
  • Searches & Hires
    • Latest Searches & Hires News
    • Searches & Hires Database
    • RFPs
  • Research Center
    • The P&I Research Center
    • Earnings Tracker
    • Endowment Returns Tracker
    • Corporate Pension Contribution Tracker
    • Pension Fund Returns Tracker
    • Pension Risk Transfer Database
  • Careers
  • Events
    • View All Conferences
    • View All Webinars
Breadcrumb
  1. Home
  2. Print
November 27, 2006 12:00 AM

Promoting development

Barry B. Burr
  • Tweet
  • Share
  • Share
  • Email
  • More
    Reprints Print

    Chet Culver, who swept to victory in the election for governor of Iowa on Nov. 7, now will have a chance to carry out a campaign proposal to have the $20.49 billion Iowa Public Employees' Retirement System invest 1% of its $2 billion private equity allocation in venture capital in the state.

    Twenty states, in fact, have some kind of provisions either in law or policy involving in-state investment of public pension fund assets, according to Samuel W. "Skip" Halpern, president, Independent Fiduciary Services Inc., Washington, The tally is based on IFS research three years ago.

    In general, the provisions are designed to bolster economic activity or serve social or political goals, Mr. Halpern said.

    "My impression is (in-state mandates) are growing," Mr. Halpern said. "But to reach a conclusion I would want to be able to survey it over time. I also think even with these types of programs, there is a pretty wide perception of the need to carry out fiduciary duties at least from the perspective of trustees and staff."

    In-state investment mandates might be an acceptable idea "if the fund board and staff have a goal of maximizing the economic benefits to the fund itself," Mr. Halpern said. "If they go about pursuing these types of programs that way, they probably won't sacrifice return or take excess risks. But that requires great care and carefully followed practices and policies."

    "My impression is unless there are adequate checks and balances in place, there is considerable political risk that can overcome what is a sound decision from an investment and fiduciary perspective," Mr. Halpern said. "But some states have installed those checks and balances."

    Laws and policies aren't always necessary to make in-state investments. The $224.2 billion California Public Employees' Retirement System, Sacramento, had 10.44% of its assets in California investments as of Sept. 30, according to its website, which updates the in-state breakout every month. "There are no laws that require in-state investing, and our board has not set any particular percentage of in-state investing," said Brad Pacheco, spokesman. "The board considers the secondary objective of promoting economic growth and well-being to the state when it is not in conflict with the board's trust duties of loyalty, care, skill, prudence, diligence and diversification."

    Mr. Culver plans to encourage Iowa PERS to make such investments, but he will leave discretion to the fund consistent with its fiduciary duty on risk and return.

    Economic development should be better tackled elsewhere. Governors and state legislators ought to inquire how their oversight is aiding or hurting the state's economic appeal. Through years of shortchanging contributions, some state public funds have built huge deficits, which ultimately will require a shift of state revenue or tax rise to fund the shortfalls. That looming cost certainly weighs in any analysis of states by prospective or existing businesses seeking to expand in the state. Iowa PERS is in better shape than most state funds. It was 89% funded in 2005, when it had $18.7 billion in assets, according to its latest report. That's above the 86.6% average of state systems surveyed by the National Association of State Retirement Administrators. But it is still underfunded, and the state recently had to raise the contribution rate paid by both employers and employees.

    If economic development is slow, there is probably a market reason. Governors and state legislators should look at tax policies, infrastructure and educational standards, among other issues, to see if and how they contribute to harming the economic climate. But pension funds? Leave the investment with fiduciaries and professionals for the sole benefit of participants.

    Recommended for You
    Read the print edition of P&I
    Gender diversity is improving on FTSE 350 boards
    Gender diversity is improving on FTSE 350 boards
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    FINRA honors Wharton's Olivia Mitchell with Ketchum Prize
    Carving a Path For Fixed Income Through Shifting Scenarios
    Sponsored Content: Carving a Path For Fixed Income Through Shifting Scenarios
    Sponsored
    White Papers
    2023 Hot Topics in Retirement and Financial Wellbeing
    Bonds: Shaken, but Not Stirred
    A Study of Allocations to Alternative Investments by Institutions and Financial…
    Unlocking Hidden Value in Japan
    The Art of the Possible in Data Automation for Institutional Investors
    Parnassus View - Investing in AI: Transformative New Tech, Same Old Rules
    View More
    Sponsored Content
    Partner Content
    The Industrialization of ESG Investment
    For institutional investors, ETFs can make meeting liquidity needs easier
    Gold: the most effective commodity investment
    2021 Investment Outlook | Investing Beyond the Pandemic: A Reset for Portfolios
    Ten ways retirement plan professionals add value to plan sponsors
    Gold: an efficient hedge
    View More
    E-MAIL NEWSLETTERS

    Sign up and get the best of News delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    Subscribe Today
    December 12, 2022 page one

    Get access to the news, research and analysis of events affecting the retirement and institutional money management businesses from a worldwide network of reporters and editors.

    Subscribe
    Connect With Us
    • RSS
    • Twitter
    • Facebook
    • LinkedIn

    Our Mission

    To consistently deliver news, research and analysis to the executives who manage the flow of funds in the institutional investment market.

    About Us

    Main Office
    685 Third Avenue
    Tenth Floor
    New York, NY 10017-4036

    Chicago Office
    130 E. Randolph St.
    Suite 3200
    Chicago, IL 60601

    Contact Us

    Careers at Crain

    About Pensions & Investments

     

    Advertising
    • Media Kit
    • P&I Custom Content
    • P&I Careers | Post a Job
    • Reprints & Permissions
    Resources
    • Subscribe
    • Newsletters
    • FAQ
    • P&I Research Center
    • Site map
    • Staff Directory
    Legal
    • Privacy Policy
    • Terms and Conditions
    • Privacy Request
    Pensions & Investments
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • Topics
      • Alternatives
      • Artificial Intelligence
      • Consultants
      • Defined Contribution
      • ESG
      • ETFs
      • Face to Face
      • Hedge Funds
      • Industry Voices
      • Investing
      • Money Management
      • Partner Content
      • Pension Funds
      • Private Equity
      • Real Estate
      • Regulation
      • SECURE 2.0
      • Special Reports
      • Washington
      • White Papers
    • Rankings & Awards
      • 1,000 Largest Retirement Plans
      • Top-Performing Managers
      • Largest Money Managers
      • DC Money Managers
      • DC Record Keepers
      • Largest Hedge Fund Managers
      • World's Largest Retirement Funds
      • Best Places to Work in Money Management
      • Excellence & Innovation Awards
      • WPS Innovation Awards
      • Influential Women in Institutional Investing 2023
      • Eddy Awards
    • ETFs
      • Latest ETF News
      • Fund Screener
      • Education Center
      • Equities
      • Fixed Income
      • Commodities
      • Actively Managed
      • Alternatives
      • ESG Rated
    • ESG
      • Latest ESG News
      • The Institutional Investor’s Guide to ESG Investing
      • ESG Sustainability - Gaining Momentum
      • ESG Investing | Industry Brief
      • Innovation in ESG Investing
      • 2023 ESG Investing Conference
      • ESG Rated ETFs
      • Divestment Database
    • Defined Contribution
      • Latest DC News
      • The Plan Sponsor's Guide to Retirement Income
      • DC Money Manager Rankings
      • DC Record Keeper Rankings
      • Innovations in DC
      • DC Plan Design: Improving Participant Outcomes
      • 2023 Defined Contribution East Conference
    • Searches & Hires
      • Latest Searches & Hires News
      • Searches & Hires Database
      • RFPs
    • Research Center
      • The P&I Research Center
      • Earnings Tracker
      • Endowment Returns Tracker
      • Corporate Pension Contribution Tracker
      • Pension Fund Returns Tracker
      • Pension Risk Transfer Database
    • Careers
    • Events
      • View All Conferences
      • View All Webinars