S.C. seeking adviser for massive pension fund
COLUMBIA — South Carolina is on the hunt for a consulting firm that will help officials choose managers for the state’s $25 billion retirement fund.
At a glance
How much is the retirement fund worth? $25 billion
How much money could the consultant make? Likely more than current firm’s $585,000 annual pay
What will the consultant do? Advise the board that oversees the pension fund on whom to invest with
Why is the state taking bids on the post now? A leader of the investment board said it made sense in light of the increasing diversification of the fund, and to find out whether the state is getting the best value
The winner, slated to be chosen by S.C. Retirement System Investment commissioners in September, figures to win a richer contract than the current consultant’s annual haul.
Sarah Corbett, the board’s deputy chief of staff, said the pension fund’s portfolio has diversified in recent years, and it makes sense to see if the commission is getting the best help for its needs.
The board has used the same firm, New England Pension Consultants, since 2006, and the company has been paid $585,000 annually.
The firm could still win out from among several other bidders, but whichever consultant is chosen will be asked to take on an expanded role that includes additional “due diligence” work, Corbett said.
Prospective consultants have had to address concerns over fund transparency and fees from S.C. Treasurer Curtis Loftis.
Loftis, a member of the board and the consultant search committee, has repeatedly argued this year that the commission pays too much in fees to its many fund managers and is too secretive in the way it handles fund contracts.
The commission’s leadership has disputed the claim, saying increasing payments to fund managers are a reflection of improving performance.
Loftis said this week that the consulting firm he ultimately votes for must pledge to address his concerns.
pledge to address his concerns.
“Many difficult and pointed conversations have occurred, and each time we, and the firms, learned a great deal about each other,” he said of interviews so far.
The commission, which oversees the retirement fund, opened up the public search process for the consultant post late last year.
Originally, the board planned to hire a firm this month, but the timeline was pushed back earlier this year.
The commission will publicly vote to hire a firm at the September board meeting, Corbett said.
She said the bidding process has closed, but the commission has not selected finalists.
Corbett declined to name bidding firms.
Loftis said the search committee has visited two firms in Portland, Ore., and one in Chicago.
In the next week, the committee will travel to Boston to meet with another firm, he said. It’s unclear if that company is New England Pension Consultants. All Corbett would confirm is that the company is “eligible” for the new contract.
Among the factors the commission will consider in choosing a consultant are the firm’s technical expertise, costs and the extent of the consultant’s prior or current relationship with the commission or other state agencies.
Reach Stephen Largen at 864-641-8172 and follow him on Twitter @stephenlargen.