R.I. pension fund earns $117M in July at rate of 1.7%

PROVIDENCE – The state pension fund earned $117.4 million, or 1.7 percent, during July, increasing the fund’s market value to $8.2 billion.

The state pension fund, known formally as the Employees’ Retirement System of Rhode Island, outperformed a benchmark plan it compares itself against, but fell short of the 1.8 percent return realized by a hypothetical plan that allocates 60 percent of its portfolio in global equity and 40 percent in fixed income.

R.I. General Treasurer Seth Magaziner, who oversees the retirement fund, reaffirmed his confidence in the state’s investment strategy.

“We are committed to strengthen the retirement system and providing retirement security for its members,” he said in a statement.

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The July increase marks the ninth consecutive month of gains realized by the state pension fund. Public pension funds throughout the country have enjoyed relatively strong returns compared to recent years, as U.S. and global markets have rallied throughout 2017.

The Rhode Island pension fund has grown $462.5 million net expenses during 2017. The fund has returned 8.5 percent calendar year-to-date, lagging the returns of both its benchmark and theoretical plans of 8.6 percent and 9.7 percent, respectively.

The Rhode Island annualized return of 10.9 percent for July, however, outpaced both the benchmark and theoretical plans. It also exceeded the plan’s target return of 7 percent, a rate that state officials reduced from 7.5 percent earlier this year.

Eli Sherman is a PBN staff writer. Email him at Sherman@PBN.com, or you can follow him on Twitter @Eli_Sherman.