ASSET OWNERS

Forensic investigation at R.I. yields transparency progress

The review of the $86.1 billion North Carolina Retirement Systems follows a similar forensic investigation of the $8.3 billion Rhode Island Employees' Retirement System, Providence.

That investigation was conducted by Benchmark Financial Services for the American Federation of State, County and Municipal Employees Rhode Island Council 94 in North Providence.

The report, which identified higher fees and special treatment given to some alternative managers, “certainly gave us a better grasp of what the investment committee is doing,” said J. Michael Downey, president of the AFSCME council. He added his union will press for legislation to bring greater transparency of fees and disclosure.

“We feel we are making progress. I do believe that these elected officials are opening their eyes as to how much money is being paid in fees,” Mr. Downey said.

That is a good thing, said Lawrence Manson Jr., chairman and CEO of NextTier Capital Solutions LLC, Chicago, which consults with institutional investors and their money managers on reducing business risk. “The more plans enter into alternatives, I think the participants will be and should be putting more pressure on trustees to better understand,” said Mr. Manson.

“All direct and indirect costs should be disclosed at the manager level. That accountability will improve performance.”

This article originally appeared in the April 28, 2014 print issue as, "Forensic investigation at R.I. yields transparency progress".