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Analysis of State Retirement Systems

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The analysis of state pension plans included the obtaining of public available information of annual returns for the longest period available and the estimates of fees based on data provided by the states. See a more detailed analysis of Florida's system here.

This analysis was completed to see if there was any evidence that the current system of using consultants and the hiring and firing of investment managers provided value beyond an allocation of passively managed mutual funds. Based on this intial review, we would conclude that there is room for improvement in the methods currently used by pension plans. Details on the index portfolios shown below can be found on our index portfolios pages, see an example of Index Portfolio 50 here. Sources of the pension plan returns and fee estimates can be found by clicking the state names in Figure 3. Consultant/Advisory fees for the passive management of index portfolios of multibillion dollar plans are estimated to be 0.05%.

Figure 1



Figure 2

Figure 3 shows the returns of the state plans adjusted for an estimate of fees paid to managers and consultants. Click on the state name to view the sources of the data.

Figure 3




Figure 4



Figure 5



Figure 6 shows the returns of the state plans adjusted for an estimate of fees paid to managers and consultants. Click on the state name to view the sources of the data.

Figure 6



As a work in progress this study is still incomplete. Figure 7 explains reasons why some states may be excluded from this study.

Figure 7



Sources

For information regarding the sources of used in this study please visit our Sources page or contact our corporate office.


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