Vote makes Rhode Island Treasury a national leader in government transparency, accountability
PROVIDENCE, RI – The State Investment Commission (SIC) today unanimously approved an unprecedented new investment policy put forth by General Treasurer Seth Magaziner, marking the first time in its sixty-year history that the SIC has adopted a formal policy on transparency.
A cornerstone of Magaziner's "Transparent Treasury" initiative, the new policy requires new investment funds that wish to do business with Rhode Island to publish information about their performance, fees, expenses and liquidity. Going forward, all fund managers will be required to sign a "transparency pledge," agreeing to the release of this information before they will be allowed to oversee Rhode Island state investments.
At today's monthly SIC meeting, Treasurer Magaziner asked the commission to formally adopt his new policy, so that it "lives beyond the life of my administration," he said.
"I am pleased that the State Investment Commission shares my commitment to transparency, accountability and accessibility in state government," said Treasurer Magaziner. "Today's vote represents a major step forward for our state and catapults Rhode Island Treasury to the forefront nationally."
In addition to requiring disclosures of all new funds that Rhode Island invests in, Treasury is currently in the process of reaching out to the state's existing fund managers to ask them to voluntarily meet these new standards. Magaziner said that the early results have been promising, and he anticipates that most, if not all, of the state's existing fund managers will agree to the new standards in the coming months.
Included in the new transparency policy is a major step toward open government that is unprecedented, both in Rhode Island and nationally: disclosure of investment-related fund expenses. Under Magaziner's "Transparent Treasury" initiative, the department of is making public the total spending on previously undisclosed expenses charged by investment managers.These fees have never before been disclosed in Rhode Island, or most other states.
In the 2014 fiscal year, fund expenses charged to the Rhode Island pension portfolio totaled more than $6 million. As a part of the Magaziner's transparency initiative, Treasury will begin reporting these fund expenses at an aggregate level immediately and on a fund-by-fund basis later this year, a first-of-its-kind policy in Rhode Island.
"This new policy on investment transparency is truly unprecedented. From now on, if you are an investment fund that refuses to have your performance, fees, expenses and liquidity made public, you will not receive business from the state of Rhode Island," said Treasurer Magaziner. "While today is a great milestone, our work does not end here. I will continue work with the SIC to make Rhode Island Treasury the most transparent and accessible state treasury in the country."