New Jersey State Investment Council, which oversees the policies governing the $79 billion New Jersey Pension Fund, has voted to report a five-year history of fees and performance data for the pension fund’s investments.
“We want to go back to make sure we capture all fees,” said Brendan Thomas Byrne Jr., chairman of the investment council, in an interview. “We want to put it out there and let the people decide.”
The council voted unanimously Nov. 18 to approve the fee review, which will be prepared by the division of investment, a unit of the state Treasury Department. The division manages investments for the pension fund.
Although no timetable has been set for reporting the data, “we want to do it as fast as we can,” Mr. Byrne said.
The council’s vote “will apply the new transparency measures introduced within the fiscal year 2014 annual report to a review of investments made over the last five years,” Christopher Santarelli, a Treasury Department spokesman, wrote in an e-mail.
The new fee information will apply to both externally managed investments and internally managed ones, Mr. Byrne said. For fiscal year 2014, 74% of pension fund assets were managed internally, according to the state investment council’s annual report. The division uses external managers only for alternative investments and for global diversified credit funds, the annual report said. The annual report said the pension fund paid $236.9 million in management fees for alternative investments and global diversified credit investments for the fiscal year ended June 30, 2014, and it also paid $334.8 million in performance fees to the managers of alternative investments and global diversified credit investments. In the 2014 fiscal year, the pension fund provided information on performance fees “while many others do not,” Mr. Byrne said.
The fee disclosure will provide “a consistent nomenclature,” making sure the reporting of fees and asset categories use the same terminology each year, Mr. Byrne said. The reporting also should provide a better way for the public to assess fees and performance of various investments. “People see fees and have such a visceral reaction,” he said.
The pension fund returned 16.87% for the fiscal year ended June 30, 2014. The unaudited return for the fiscal year ended June 30, 2015, was 4.16%. The 2015 annual report has not been published.