Letter: Return Your Personal Pension Profits, Governor

To the editor:

Governor Raimondo, you have made huge ​personal pension profits​ into the pension system. ​

​T​he money you made off the pension should be given back to the pension fund.

The Rhode Island pension system has lost 1.1 percent of its investment into ​the​ venture capital fund Point Judith, that made a profit for one of its owners-​former Treasurer and now Governor ​Raimondo. The ex-fiduciary made money at the same time she took the COLA from 32,000 ERSRI retirees when she pushed for​ RIRSA 2011. And regardless of the fund's performance, Raimondo and others in the fund will continue to earn 2.5 percent annually.

​That money she made in personal gain should be returned to the state pension fund ​(best estimates approximately $800,000 so far).​

That is her legal fiduciary duty to 63,000 ERSRI pensioners. She cannot by law make personal profit but in this case she did and she should be mandated to return it. It raised $74,910,000 in 2006 according to SEC documents.

https://www.sec.gov/Archives/edgar/vprr/06/9999999997-06-025808

Raimondo owns some substantial interest and continues to derive income from the fund as she kept her hedge fund policies in place paying the high managerial fees (fees on fees-fees on committed but un-invested capital as she took the 3% COLA and​ practiced​ preferential hedge fund treatment- all done as Treasurer)

And according to the April monthly SIC report, the fund's internal rate of return as of December 31, 2015 is -1.1%.

While the ex Treasurer now Governor was making 2.5% profit from the fees, the overall state pension fund's rate of return was less than zero.​

http://data.treasury.ri.gov/dataset/7a475671-426f-4bd5-b6a7-031153501a09/resource/546010fb-add5-49d0-9764-bce9227f53c0/download/April-2016-SIC-Book.pdf

And only now, after 2 years of dismal performance and losing the pension millions, the SIC Board voted to approve redemption from Luxor Capital Partners L.P. The state pension went from ​$50m to ​$35m on this investment...the pensioners lost $15m when this investment should have been removed much earlier from its portfolio. With investments like Luxor, Point Judith and others​, the fund performance will continue to be dismal, now slipping into the negative.

​ ​And yet had Rhode Island invested that money in the stock market during that time, they would have gotten close to 7% T-bills would have even been 1.2%, according to ​f​ormer SEC lawyer &​ Forbes columnist Edward Siedle,

Sincerly,
Jo Fonseca
Cranston, RI resident​ , voter and taxpayer