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.
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.