The South Carolina pension scandal continues to escalate. Despite receiving personal attacks by political elites, Treasurer Curtis Loftis, continues to expose the controversial details surrounding the state's pension system. The yellow Lamborghini, frequent nightclub excursions, dinner with a centerfold model, and risky deals with Wall Street fund managers are among the "red flags" Loftis has exposed.
Loftis continues to voice his anger over the exorbitant fees, poor performance, and gross mismanagement of the state's pension system.
Loftis wrote on Facebook: "The fees our State Pension pays are outrageous! We pay the highest fees in the country (1.59%), $427.5 million last year, yet we were in the bottom 20% in investment performance. In 2007, we paid ten times less than we do now, but we were still in the bottom 20% in performance! Higher fees do not mean better performance, and we have to make a change!"
Speaking at a meeting of the First Monday Republican Lunch Group on Hilton Head Island, the South Carolina Treasurer Curtis Loftis continued his pointed words towards South Carolina Retirement System Investment Commission for risky investments and for paying exorbitant investment fees.
According to the Hilton Head Island-Packet, Loftis called the commission's work "sinful" and lacking in moral core.
A Republican elected in 2010, Loftis, and the commission, which oversees the $27 billion retirement fund for state works have been at odds for the past two years.
In front of 85 people on Monday, Loftis called the commission corrupt and mismanaged, citing the $420 million in investment-management fees during its most recent fiscal year.
Those fees — more than 10 times what they were in 2007 — equal 1.57 percent of the commission's managed assets, far more than the 0.57 percent on average paid by other comparable pension funds, he said.
Loftis told Institutional Investor that he is trying to simplify the fee structure. "We did not create the most expensive pension portfolio in America overnight, and these fees will not be removed overnight," he said.
The fees, experts say, are because the commission uses alternative asset investments like hedge funds and real estate.
Despite this, the fund has reported lower than average return on investment.
"We pay too much; we earn too little, and our portfolio is overly expensive and complex," Loftis told the crowd, "which puts retirees and taxpayers at risk."
In addition to getting the fund back on track, Loftis, according to Institutional Investor, is advocating RSIC term limits and other institutional changes.
Last year, Loftis walked out of a meeting claiming he was falsely accused of verbally assaulting pension chief, Darry Oliver (See video below). Oliver resigned in protest and was replaced by former state Sen. Greg Ryberg.
Ryberg told Institutional Investor that the current fees are justified. Loftis disagrees. South Carolina insiders expect sparks to fly as Loftis continues to call for reforms and transparency. The Investment Commission is planning to meet this week.