Eric Baggesen manages the assets and portfolios of the Ocean State’s state pension system as the chief investment officer for the R.I. Office of the General Treasurer.
Baggesen, who earned both his bachelor’s degree and MBA at the University of Rhode Island, joined the R.I. Treasury in July 2022 after spending 16 years as an executive with the California Public Employees’ Retirement System. At CalPERS, he worked his way up from senior portfolio manager covering global equities to managing investment director of asset allocations, a position that he held for seven years. Baggesen retired from CalPERS in December, only to be lured back to Rhode Island after his predecessor left to run the Virginia Retirement System.
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PBN: What does the R.I. State Investment Commission do?
BAGGESEN: The R.I. State Investment Commission is responsible for the investment of the state’s assets. That includes the Employees’ Retirement System of Rhode Island’s Defined Benefit Fund, which is approximately $10.3 billion. It also manages the ERSRI 401(a) Defined Contribution Fund ($1.6 billion); the R.I. 457 (b) Savings Fund ($500,000); the Ocean State Investment Pool ($1.3 billion); the R.I. General Fund and various state departments ($1.8 billion); the Other Post Retirement Benefits Trust ($600,000); and the CollegeBound 529 Savings Program ($4.1 billion).
PBN: It appears the commission oversees more than $20 billion in pension funds. Are state pensions its sole purview?
BAGGESEN: There are also some additional small programs or trusts for which the SIC has investment responsibility. The approximate total assets for which the commission oversees is about $20 billion. The SIC is also responsible for the formulation of the various policies guiding the activity of the general treasurer’s investment staff and external consultants.
PBN: What is your role at the SIC and how do you interact with the commission’s seven members?
BAGGESEN: I personally am not an SIC member and do not vote on the decisions before the SIC. The establishing statute specifies how the body is composed. Seven members are appointed – three by the governor, four by the treasurer inclusive of a member from the state employee unions – with general-public members being qualified by experience or training in investment or finance.
The general-public members are all involved with other activities that are directly or tangentially related to the responsibilities of the SIC, and thus it is believed a synergy exists for the members.
PBN: How often does the commission meet and what do you feel that you contribute to the meetings?
BAGGESEN: The commission typically meets monthly and considers material and recommendations assembled by the investment staff of the Treasurer’s Office and by the external investment consulting firms. The members contribute by their review, [discussion] and input regarding the recommendations and material before them, and by identification of information and topics they believe important for the body to review.
PBN: How does the commission make decisions? Is there much discussion or debate?
BAGGESEN: Decisions are made by motion and majority vote of the nine voting members. The executive director of ERSRI, Frank Karpinski, is a nonvoting member. There is typically very extensive discussion and frequent debate regarding the information and recommendations put before the body.
The SIC benefits from having a wide array of knowledge and experience of the members and all are encouraged to articulate their viewpoints and beliefs.
Sam Wood is a PBN staff writer. Contact him at Wood@PBN.com.
