October 9, 2017      4:40 PM
Greenfield: Raising returns and reducing costs at ERS is achievable
Economist Dr. Stuart Greenfield argues that if ERS had invested in a market index fund, its total return would have been 3.6 percent greater over five years
While attending college
and taking a class in economics, my major, a professor after listening to my
response to a question asked: “Are you stupid or just from Jersey.” With my
usual wit I replied, “both.” I hope the analysis that follows isn’t a repeat performance.
After attending the recent
Retirement System’s Trustee meeting,
in investment policy appears to violate the fundamental rule of finance; higher risk should be compensated by earning higher returns. The adopted
changes will reduce investments in fixed income securities and domestic stocks
and redirect these reductions to alternative investments, i.e., real estate, hedge
funds. This reallocation intends to
improve the rate of return on the ERS portfolio.
Trusts, the ranking of ERS is not world-class. In fact, it is not
As the Table One shows
between 2005 and 2015, the performance of ERS relative to other public retirement
systems has deteriorated.
words, the ERS ranking has gotten worse
The full column by Dr. Stuart Greenfield can be found in the R&D Department.
By Dr. Stuart Greenfield