The South Carolina commission that oversees public employees' retirement system took an initial step Thursday to create a new, government-owned investment management company.
The state Retirement System Investment Commission voted unanimously to proceed with investing up to $15 million through the unique investment method. A research director with the National Association of State Retirement Administrators said he knew of no similar arrangement in another state.
Treasurer Converse Chellis said the idea is to increase the state's return on investment, to reduce the potential cost of retirees' pensions to taxpayers and employees. While he supports the idea, he said, he wants further details on the arrangement in writing.
The newly created company would invest in private capital, such as real estate and South Carolina companies. It would represent a fraction of investments made through the state's $24 billion retirement trust fund, as part of the commission's efforts to diversify.
According to a consultant's report, the plan could save the state about $500 million in management fees over the next decade, by cutting in half the initial investment fees, plus reducing the profit cut taken by private investment managers.