Treasurer Eric Russell says pension funds showing recent gains, outlines staffing and asset-allocation changes

Connecticut State Treasurer Eric Russell told the Finance, Revenue and Bonding Committee on the informational forum that his office has focused on building staff capacity and changing the pension funds’ asset allocation to improve long-term returns. "Our mission in the office is very clear, and it is to get the best risk adjusted returns for our pensioners and retirees and both current and future pensioners," Russell said as he previewed a slate of reforms and performance data.

Russell said the Pension Funds Management division now includes a chief investment officer, seven principal investment officers and a larger support team, with what he described as "over 150 years of combined investment experience" across senior staff. He credited recent legislation that allowed the office and the Investment Advisory Council (IAC) to recruit and retain investment talent and to create new career ladders inside the division.

On performance, Russell presented year‑end figures the office uses in IAC materials: a fiscal‑year return (as of June 30, 2023) of 8.5% that he said added about $1.1 billion over benchmark, and a calendar‑year 2023 return of 12.8%. "We performed at 12.8% as a pension fund," he said, and noted the InvestMetrics peer data the office uses to place recent results against large public pension funds.

Russell and Chief Investment Officer Ted Wright described a multi‑step manager selection process that combines internal screening, consultant review, legal and compliance diligence, IAC review and ongoing quarterly monitoring and a watchlist for underperforming managers. Russell said the office is pursuing fewer, higher‑conviction managers to reduce fee layers and improve efficiency.

The treasurer also outlined a 2022 asset‑allocation study and a five‑year pacing plan to increase the funds’ allocation to private assets (private equity, private credit, real assets, infrastructure) while managing unfunded commitments and vintage‑year diversification.

Russell emphasized transparency and public access: IAC meetings are public and materials are posted online, he said, and he urged legislators to attend for more detail. He credited recent additional state contributions—about $8 billion over recent years—for improving funded ratios, which he cited at roughly 52% for the state employee plan and nearly 60% for teachers.

Committee members pressed for specifics on benchmark choice and long‑term comparisons. Russell urged a long‑term view: while short‑term gains are encouraging, he said the office evaluates progress on multi‑year performance and the durability of reforms. He welcomed questions and promised follow‑up materials to committee staff.