For Immediate Release
January 12, 2017
PA Treasury and Wolf Administration Consolidate Investments to Reduce Investment Fees
Harrisburg, PA - Governor Tom Wolf and State Treasurer Timothy Reese today announced the transfer and consolidation of three investment funds with combined worth of approximately $2.3 billion, which will reduce by millions the fees paid to outside investment managers.
“With the commonwealth facing a serious budget deficit, we cannot afford to hand money from any fund to Wall Street when we could better manage the money ourselves and save millions of dollars. This effort further reflects my focus on cutting costs and creating efficiencies in state government to avoid disastrous cuts and preserve our investment in education, middle-class job creation and vital services like drug treatment. I want to applaud Treasurer Reese for his collaborative work on this project and hope this is the beginning of a larger effort to cut fees to Wall Street.”
Pennsylvania Governor, Tom Wolf
The consolidation will move the investment management of the State Workers’ Insurance Fund, Workers’ Compensation Security Fund, and Underground Storage Tank Indemnification Fund to Treasury eliminating private managers and achieving savings of $5.6 million annually.
“Considering the current budget constraints we face as a state, it simply doesn’t make sense to continue to pay someone else to do what Treasury can do for a fraction of the cost. I am pleased that the Governor recognizes, and is confident in Treasury’s ability to efficiently safeguard and invest the money in these funds, and I want to thank him and his team for working to make the transfer seamless.”
Pennsylvania Treasurer, Timothy Reese
The savings by fund include:
- State Workers’ Insurance Fund: Currently managed by 24 firms for $3.3 million annually. Treasury will manage the funds for approximately $145,000, saving $3.1 million annually.
- Workers’ Compensation Security Fund: Currently managed by 12 firms for $2.9 million annually. Treasury will manage the funds for approximately $500,000, saving $2.4 million annually.
- Underground Storage Tank Indemnification Fund: Currently managed by nine firms for $600,000 annually. Treasury will manage the funds for approximately $75,000, saving $525,000 annually.
During his tenure, Treasurer Reese has made it a priority to review all of Treasury’s investment strategies and managers to increase efficiency, improve performance and leverage investments to improve the state’s economy. This includes launching a $500 million emerging manager fund that identifies innovative and diverse investment approaches and creating a $100 million impact investment fund that will provide Treasury with a competitive return while investing in affordable housing, small business and infrastructure projects throughout Pennsylvania.
Scott Sloat: (717) 783-4098, (717) 695-1789 or firstname.lastname@example.org.
The Pennsylvania Treasury is an independent department of state government led by the state treasurer, who is elected every four years. The department's primary duty is to safeguard and manage the state's public funds. It invests state money to generate income on behalf of the citizens of Pennsylvania, reviews and processes payments for state government agencies, and serves as custodian of more than $100 billion in state funds. Key Treasury programs include Unclaimed Property, PA 529 College Savings Program and the Board of Finance and Revenue.