As a follow-up to your story "City pension officials spend nearly $100,000 on trips" (March 19), I'd like to clarify some information about the city employees' pension plans and pension officials' business travel.
As fiduciaries, our goal is to prudently manage and grow the assets of the complex, $1.5 billion city public pension fund. This requires that we stay on top of investment strategies and market events in a very dynamic environment.
We also maintain a broadly diversified asset allocation handled by managers globally. Continuing education, professional development and ongoing monitoring of manager performance are critical to performing our duties and upholding our obligation to members and beneficiaries.
Plan expenses, including business travel, come chiefly from investment earnings, not from city general funds. And we strive to keep our travel expenses as reasonable as possible.
For instance, we reduce costs by meeting with managers in our offices and participating in webcast conferencing and presentations for in-depth overviews of various investment products or markets.
However, there are times when meetings and training must take place in other locations. By attending these critical educational conferences, trustees become better informed and can make prudent investment decisions. This is substantiated by the financial strength of both plans, which have seen double-digit investment returns:
For example, the City Employees' Plan (ERS) generated 16.2 percent in investment returns in fiscal year 2014, a 3 percent increase from the previous year and nearly double the 7.75 percent expected rate of return.
The City Elected Officials' Plan (EOS) grew by 15.3 percent, to $23.5 million, in fiscal year 2014. It returned 17.4 percent on its investments, an increase of 13 percent over 2013.
Both plans are capable of meeting all retirement obligations when they come due. The ERS' funded percentage is improving, while the EOS is over-funded at 126.5 percent. The plans are not "struggling," as your article claimed.
In today's global environment, it's critical that we look beyond the usual fixed-income investments to other strategies. Part of our recent financial success is due to investments in emerging markets, such as Brazil, Russia, India, China, Nigeria, South Africa and frontier markets in Asia and Africa.
A growing component of our investment strategy is alternative assets, as is the case with many pension funds. Ongoing due diligence and attendance at meetings in the U.S. and overseas are essential to properly monitor our investments.
In short, I want to assure city active and retired members that their pensions are being appropriately managed by conscientious trustees and pension officials. I'd also like to invite anyone who is interested to visit http://www.bcers.org, where you can review in-depth details about the plans and their financial performance.
Roselyn H. Spencer, Baltimore
The writer is executive director/CIO of the City of Baltimore Employees' & Elected Officials' Retirement Systems and City OPEB Trust.