New Diossa Op-Ed in The Providence Journal: RI Strengthening Pension Fund, Making Gains in Investments

Published on Monday, October 30, 2023

Providence, RI – On Saturday, Rhode Island General Treasurer James A. Diossa published an op-ed in The Providence Journal focused on strengthening the state’s pension fund and on making gains in investments. You may read the op-ed here and below.

For the second time in more than 120 years, the "Independent Man" statue atop the Rhode Island State House will be taken down to repair its base. The gilded figure, aptly named “Hope,” has served as a beacon of hope for generations of Rhode Islanders, through good times and bad. Today, many of our families struggle with inflation, housing costs and other economic challenges. There’s much work to be done on their behalf, yet I believe we have good reason to be hopeful for the future. 

In recent years, Rhode Island has taken bold steps to spur economic growth and financial stability. Whether it’s investments in housing, clean energy or infrastructure, we’ve seen a team effort led by Gov. Dan McKee, House Speaker Joe Shekarchi and Senate President Dominick Ruggerio. As treasurer, I have had the honor of working closely with these and other leaders to protect and grow our state’s assets and encourage economic growth for all our residents. 

Rhode Island has also strengthened its rainy day fund. And thanks to legislation spearheaded by Speaker Shekarchi and President Ruggerio, half of any annual excess revenues are to be deposited into the state's pension fund. This year, that equals nearly $6 million. Through such forward-thinking action, the state’s legislative leaders have made clear their commitment to the financial security of Rhode Island’s past and present public servants. 

With my first anniversary as general treasurer nearing, I am proud of my office’s efforts to strengthen the state’s pension fund and ensure that retirees, public employees and taxpayers get the best possible returns on their investment.

In September, I was pleased to announce that the state’s pension fund outperformed investment benchmarks over the past fiscal year. In fiscal year 2023, the fund demonstrated an 8.9% net return, outperforming the benchmark return of 7.1%. Its three-year performance demonstrated a 10.5% net return, outperforming the benchmark return of 9.7%.

Meanwhile, our Other Post Employment Benefits fund demonstrated an 11.2% net return, outperforming the benchmark return of 7.7%. This despite market unease in recent years, and a challenging market in 2022. To ensure long-term stability despite changing market conditions and the realities of a cash flow negative system, I have commissioned an asset allocation study of our investments. We’re on the right track. 

The result of these combined efforts has not gone unnoticed. Recently, the nation’s top rating agencies delivered high marks for Rhode Island. Fitch assigned a AA rating and upgraded our outlook to Positive. Meanwhile, Moody's assigned a AA2 rating, and S&P Global Ratings assigned a AA rating. These ratings reflect our proactive fiscal management and effective leadership, and another reason to feel hopeful for our state’s future. 

However, I am also aware of the challenges that many of our neighbors face every day. These are turbulent economic times with rising inflation and interest rates impacting buying power. It has gotten harder for many families to dream of homeownership, or to simply afford rent, groceries and gas. Growing up in a blue-collar household in Central Falls, I can relate to their struggles. This motivates me to push for greater economic growth and investments in our state, expanded financial literacy programs, more attainable housing opportunities, and a government that is responsive to people’s needs. 

In the coming days, I will convene − at the legislature’s request − a pension impact study group to review the state of our pension system and its impact on retirees, active and future employees, and all taxpayers. I am committed to listening to all stakeholders and to maximizing the short- and long-term return on our investments. We need to look out for all Rhode Islanders during these challenging times. 

Together, we can ensure that all Rhode Islanders have the opportunity to thrive and prosper.