The RSIC works diligently to maintain its position as an industry leader in investment fee transparency. We remain committed to executing best practices that control and reduce management fees through portfolio diversification, fee negotiations, and selective use of asset management. This includes obtaining fee concessions on new and existing investments and limiting active management within inefficient asset classes.
Because public pension plans investment management fee reporting requirements vary based on their respective jurisdictional regulation, comparing one plans fees to another’s may not be an apples to apples comparison. In short, not all states disclose the same fees. Consistently, the RSIC has gone to great lengths to report invoiced management fees, management fees netted against investments, performance fees (both accrued and paid), and other expenses including administrative costs in limited partnership structures.
*“Investment fee transparency, policies, and controls have improved significantly and disclosure of fees is the most complete in the industry.”
–Funston Advisory Services Presentation to the SC Joint Committee on Pension Systems Review 10/26/2016
We believe in transparency and upholding our fiduciary responsibility to manage the assets held in trust for our plan participants and beneficiaries. This includes benchmarking our annual cost and return performance to Cost Effectiveness Measurement Inc.’s (CEM) extensive pension database. In making fiduciary decisions, we are partners with and advocates for our members, and we believe in helping them understand what they are paying for.
**“… after reviewing SCRSIC’s cost collection process, we conclude that they are simply reporting more costs than other funds rather than incurring more costs.” –CEM Benchmarking Inc., The Time Has Come For Standardized Total Cost Disclosure For Private Equity
Furthering our commitment, the RSIC partnered with the Institutional Limited Partners Association (ILPA) in the creation and promotion of the ILPA Reporting Template. The ILPA Reporting Template is the result of the 2015 ILPA Transparency Initiative which promotes transparency and alignment of interests between private equity investors (LPs) and the managers with whom they invest (GPs). The RSIC is proud to endorse the ILPA Reporting Template as a new, industry leading standard in fee disclosure and the creation of industry uniformity in private equity fee disclosure.
“... when compared with other pension funds with similar investments, the fees South Carolina pays are 'normal and not excessive'.” -Funston Advisory Services, Audit: SC pension agency doesn’t overpay in fees
Additionally, the RSIC has been recognized as an industry leader in fee transparency by the PEW Charitable Trusts. RSIC’s investment costs, performance information, can be located in the Annual Investment Report, the Comprehensive Annual Financial Report published by PEBA, and the Investment Cost Effectiveness Analysis performed by CEM.
Below is a schedule of the investment manager fees and expenses by asset class for Fiscal Year 2020, excerpted from the Annual Investment Report.
Investment Management Fees and Expenses by Asset Class
*Presentation to the South Carolina Joint Committee on Pension Systems Review Funston Advisory Services LLC (FAS) is recognized as one of the nation's preeminent advisors to public retirement systems in the areas of governance, operations and risk intelligence. Funston’s work is well documented in their book, “One of a Kind! A Practical Guide for 21st Century Public Pension Trustees.”
**The Time Has Come For Standardized Total Cost Disclosure For Private Equity CEM is a unique and rapidly growing global benchmarking company. CEM specializes in benchmarking cost and performance of investments and administration, making ‘apples-to-apples' comparisons and providing insights into best practices.