The beleaguered state pension system actually notched a 3.22% gain for the fiscal year ended June 30, instead of the earlier reported 3.47% (See Maryland State Pension Records 3.47% Gain In Fiscal 2003 ). Regardless, the past year’s results are still considerably better than the previous two, when the state’s $26.7-billion retirement plan was down 7.63% and 9.41% in 2002 and 2001, respectively, according to a Baltimore Sun report.
The error was made by a unit of State Street Corp., which provides pricing, accounting and other services for more than 40% of all mutual funds, and more than 40% of all public pension plans, including Maryland’s. “Indeed, we did miscalculate the fiscal-year performance return of the [Maryland] pension fund,” said Hannah Grove, senior vice president of marketing and communications for the Boston bank.
Though seemingly small, the reduction in the Maryland system’s reported investment return had a somewhat larger impact on how this state’s retirement plan ranked against its peers. Previously, 65% of other public pension funds were said to have performed better than Maryland, according to the Trust Universe Comparison Service (TUCS), the Wilshire Associates’ benchmark that is widely known for public investment plans. However, with the reduction, 74% of these funds now had better investment returns than this state.
Also, the latest debacle represents yet another smudge for a state pension plan that has been in the headlines plenty this past year. In July, Baltimore money manager Nathan Chapman Jr pleaded not guilty to charges of defrauding the pension system and “looting” his own companies (See Chapman Pleads Not Guilty in Maryland Fraud Case ). Additionally, a former trustee of the pension system, Debra Humphries, was indicted on perjury charges after she allegedly lied about cash and gifts worth more than $46,000 authorities say she received from Chapman (See “Relationships” Entangle Maryland Pension Fund ).