MA Town Turning Well-Run Pension over to State

September 4, 2007 ( - The town of Wellesley, Massachusetts may be turning over its pension management to the state, but it is not because it was an underperformer under local control.

A Dow Jones news report said officials decided to turn over management of the Wellesley Contributory Retirement System to the Massachusetts Pension Reserves Investment Management (PRIM) board so Wellesley could enjoy more access to a greater array of investment options.

Wellesley  was among the leading local Massachusetts  pension funds with a 16.23% 2006 return;  last year, PRIM recorded a 16.72% return. The Wellesley  fund has $144 million in assets while PRIM has $50 billion.

“We are 110% funded and have the best returns in the state, but we thought it was time to capitalize on successes,” David Kornwitz,Wellesley ‘s board chairman, told Dow Jones. “The state fund offers us greater oversight, diversification across asset classes and access to certain types of investments without an increase in cost structure.”

Massachusetts  last month passed a law that requires underperforming local funds to transfer their assets to the state fund (See  MA Legislature Approves Measure to Give State Control of Ailing Local Pensions ).