SOUTH CAROLINA’S STATE PENSION BOARD How the South Carolina Retirement System Investment Commission puts retirees and taxpayers at risk

Curtis M. Loftis, Jr., State Treasurer May 2015

The South Carolina Retirement System Investment Commission:

1. We pay too much.

2. We earn too little.

3. Our portfolio is overly expensive and complex.

4. Puts retirees and taxpayers at risk.

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SC PENSION FUND FEES & EXPENSES

$19 $23 $22 $31 $39

$130

$176

$314 $332

$304

$427.5

$468

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

BOTTOM 20% INVESTMENT

PERFORMANCE

10x the Fees But Still

BOTTOM 20% INVESTMENT

PERFORMANCE

Fees have increased 10x since 2007, but returns remain among the lowest in the country.

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$348,000,000

$10,365,000,000

$17,371,000,000

$19,328,073,000

1999 2006 2013 2014

UNFUNDED ACTUARIAL LIABILITY 1999 to 2014 Accrued

4

0.57%

1.56%

National Average (2013) South Carolina

2014 INVESTMENT FEES & EXPENSES (% of Ending Assets)

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$468

$171

SC’s WORKING CLASS TO WEALTHY MONEY MANAGERS TRANSFER OF WEALTH

$297,000,000 TRANSFER OF WEALTH

TO WALL STREET MONEY MANAGERS

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Actual SC Fees for FY2014

SC Fees at the National Average

$468 million paid in 2014

$171 million had we paid national average of .57%

minus

equals

SC’S RETIREMENT FUND ALTERNATIVE INVESTMENTS

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21%

47%

Median (National Council of PublicEmployee Retirement Systems)

South Carolina

South Carolina’s Share of Alternative Investments to Total Assets versus the National Median

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