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Saturday, December 18, 2021

RI Pension system funded status grows to highest level in over a decade

Treasurer announces significant improvement in financial condition of state pension fund 

Rhode Island General Treasurer Seth Magaziner announced the total unfunded liability of the Employees’ Retirement System of Rhode Island decreased by $408,597,654 in the fiscal year ended June 30, 2021, and the funded status grew to 63.9%, the highest level since 2008. 

This is the third year in a row that the unfunded liability has decreased and represents the largest decline in a single year ever. 

 “My mission as Treasurer is to support economic opportunity and financial stability in Rhode Island, including by strengthening the pension fund that thousands of Rhode Island families rely on for retirement security,” said General Treasurer Seth Magaziner. “Under our 'Back-to-Basics' Investment strategy, we have helped the pension system reach new all-time highs, consistently outperforming other public pension funds.” 

 During Fiscal Year 2021, the pension system earned a 25.6% investment return and ended at an all-time high of more than $10.3 billion in assets. The overall funded status of the pension system, which includes plans for state employees, teachers, judges, state police, and municipal employees, rose from 60.5% to 63.9%.  

Among the 117 municipal plans managed by the pension system, 37 are more than 100% funded (up from 30 last year), and 81 are at least 80% funded (up from 76 last year).  

 Notably, under the system’s actuarial practices, the value of assets used to calculate the funded status of the pension system is based on a five-year average. If the actual market value of the system’s assets as of June 30 was used, the funded status of the system would be 70%. 

 In addition to the strong performance of the previous fiscal year, the Rhode Island Pension Fund has demonstrated continued the strong performance achieved so far in Fiscal Year 2022. According to the InvMetrics Public DB Database, which tracks the performance of 597 public pension plans, Rhode Island outperformed 97% of plans in the first quarter of Fiscal Year 2022 (from July 1 through September 30).