State Treasurer Dale Folwell said Tuesday that he has lowered the fees that the state pension fund pays to Wall Street money managers by nearly $50 million, putting him on track to exceed his campaign promise to cut management fees.
Folwell, a Republican who was elected treasurer in November, vowed during the campaign that he would cut fees paid by the state’s $92.2 billion pension fund by $100 million over his four-year term.
Folwell previously reported in April that he had carved out $25 million in fee savings. On Tuesday he told reporters that, with the additional savings achieved, he’s on track to cut $200 million in fees over four years.
“We expect that to go higher as we progress through the year,” he said.
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Folwell said that in addition to terminating contracts with money managers who have under-performed compared to the benchmarks set for them by past treasurers, he has also renegotiated contracts. In one instance, a manager’s fee was reduced by $2.4 million.
Much of the money that was being invested with money managers whose contracts have been terminated is being shifted to investments in bonds, which the treasurer’s office manages in-house.
The state pension fund provides retirement benefits for more than 950,000 teachers, state employees, firefighters, police officers and others.