NEW YORK – General Treasurer Gina M. Raimondo is taking heat from a new source for her efforts related to the state workers’ pension system, but the criticism is not coming from a local source.
In a lengthy analysis of analysis of Raimondo’s choices in taking on the repair of the underfunded state employee pension system that is now in mediation to avoid a court case challenging its legality, Forbes.com contributor Edward “Ted” Siedle titled Rhode Island Public Pension ‘Reform’ Looks More Like Wall Street Feeding Frenzy, posits that Raimondo’s investment choices have enriched hedge fund chiefs and money managers while increasing the risk to the state’s funds, all while trimming the benefits being paid out to retirees.
“Essentially, there has been a coup – the foxes (money managers) have taken over management of the henhouse (the pension),” said Siedle. The blogger went on to raise concerns about employees in Raimondo’s office having too close (and too recent) ties to Wall Street, the performance of a group of investments Raimondo made while heading Point Judith Capital, the growing percentage of “illiquid investments” that the treasurer has made for the pension fund, and the lack of transparency for the alternative investments she has pursued, including hedge funds, among other things.
WPRI-TV CBS 12 reporter Ted Nesi picked up on the Siedle column and included a chart that showed the change in asset allocation for the state’s pension funds from 2006, under previous General Treasurer Frank T. Caprio, to 2012 under Raimondo, with alternative investments of the kind that Siedle described rising from roughly 6 percent to about 23 percent as more conventional investments shrunk percentagewise.