State Treasurer Janet Cowell is at it again, sending a letter to legislators urging the passage of SB 558 – a bill that would allow the Treasurer’s office to invest a higher share of the pension fund in “alternative” investments.
State Treasurer Janet Cowell is urging lawmakers to give her more flexibility to invest the state’s pension money, warning that is is “very unlikely” returns will meet projections without the change.
A Senate bill to allow the treasurer to increase investments in real estate and alternatives such as hedge funds, commodities and asset-backed securities. Cowell said the new flexibility won’t guarantee the state can meet its returns but “we’d have a fighting chance.”
Under the measure, Cowell could move away from publicly traded stocks and bonds and invest up to 40 percent of the state’s pension in alternative investments. The current limit is 36 percent. The bill also would allow any one category of investments to equal as much as 15 percent of the fund’s investments.
I wrote previously about SB 558, making it a “Bad Bill of the Week,” describing the legislation as a desperate move to engage in more risky speculative investments in order to try to make up for poor returns in recent years and to try to live up to unrealistically rosy projected returns in future years.