Dr. David Bronner is Special Guest for Jefferson County Retired Teachers
Dr. David Bronner, executive director of the Retirement Systems of Alabama (RSA) for Teachers, spoke to the Jefferson County Retired Teachers Association at their February meeting. He was introduced by Sarah Swindle, former board of director member and retired teacher from Berry High School as an English teacher. One of Bronner's main points was that the RSA keeps its expenses low by managing its investments in-house and directly. RSA does this through its highly-qualified professional investment staff of 17, including 12 holders of the Chartered Financial Analyst designation.
For the last three years, RSA's investment expenses have averaged 3 basis points (or 0.03% of its assets.) By comparison, South Carolina, whose investment expenses are higher than most, spent 123 basis points on investments in fiscal year 2014, which amounted to $361M.
Note that this is compared to the $9M that the RSA spend in the same fiscal year to invest a portfolio that is larger than South Carolina's.
What does this mean for RSA members and employers? It means more of RSA's investment returns can be used to pay their benefits, rather than paying outside investment management firms. This means that more investment returns can be used to reduce the unfunded liability, rather than to request that additional funding from the employers. All in all, it means a stronger and healthier RSA.
Margaret Beard who retired in 2013 is president of the retired teachers' association for Jefferson County.