Members of the Senate State Affairs Committee unanimously passed a bill that revises certain provisions regarding the state investment council. Matt Clark is the State Investment Officer. He says the council’s budget comes from the accounts it manages. A percentage is taken across all of the funds proportionally to the size of the assets in the fund. Clark says Senate Bill nine lowers the amount allocated to the cash flow fund to two one hundredths of a percent. He says the council will increase the charge for the rest of the funds by about one-one hundredths of a percent.
“The reason for this is that the cash flow fund cannot invest in the higher cost types of investments that we invest for the retirement system in the trust funds,” Clark says. “The cash flow fund can only invest in investment grade fixed income securities which generally are very low cost in the investment industry. So it’s always seemed unfair that they had to pay the same charge for basically a plain vanilla simple little service that we’re providing for them as what the retirement systems and the trust funds would pay for the fancied up full suite of services that we provide for them.”
Clark says the legislation also allows the state investment officer to transfer these funds into the investment council’s budget account in pieces throughout the year instead of in one lump sum.