Retirement fund has new consultant

COLUMBIA — For the first time in six years, a new consulting firm will help guide South Carolina’s investment of its $25 billion retirement fund.

The S.C. Retirement System Investment Commission voted unanimously Thursday to switch from current consulting firm New England Pension Consultants to Hewitt EnnisKnupp.

NEPC was the other finalist for the advisory role, and both companies made their final pitches to the commission before officials decided to contract with the new firm.

Commission Chairman Reynolds Williams held his fingers a half-inch apart and said it was “this close” as he described the quality of both companies’ bids.

“We had nothing but an excellent experience with NEPC,” Williams said. “It’s just that it’s always a good idea to have new blood and fresh thinking.”

He said any two organizations have strengths and weaknesses.

“The area that we believe that we’re heading over the next five years, they (Hewitt EnnisKnupp) have some significant strengths that we wanted to take advantage of.”

Williams declined to describe those strengths, citing a desire to not make it look as though NEPC is weak in that area.

According to preliminary reports, the profits on the pension fund’s investments were down this year, leading the fund’s value to decline by more than $950 million compared with last year.

Williams has attributed the development to the cyclical nature of the market.

Herschel Harper, the commission’s new chief investment officer, said like NEPC, Hewitt EnnisKnupp will be tasked with examining commission policies and governance, along with asset allocation and portfolio structure.

“They may have some recommended changes on the investments themselves,” he said.

The commission still must finalize a contract with Hewitt EnnisKnupp, which officials aim to do before the commission’s current contract with NEPC expires Sept. 30.

The new firm is likely to make much more than the roughly $580,000 paid to NEPC annually.

Williams said NEPC’s and Hewitt EnnisKnupp’s bids were “significantly higher” than the value of the current contract.