Hartford Business Journal

HARTFORDBUSINESS.COM | JANUARY 13, 2025 9 State Treasurer Erick Russell, at his desk in his Hartford office, has led efforts to methodically reallocate the state's portfolio into private markets, with positive results. HBJ PHOTO | DAVID KRECHEVSKY Asset Reallocation Here's how state Treasurer Russell has reformed the state's pension fund investment strategy order. During his tenure, the pension fund has seen notable improve- ment — in December, Russell joined Lamont and Comptroller Sean Scanlon in announcing the state employees retirement system is now 55.2% funded, the highest level since 2003, while the state teachers' pension fund is 62.3% funded, the highest since 2008. While that means Connecticut remains one of just six states with employee pensions funded below 60%, the improvement is significant. It's due in part to $8.5 billion in additional contributions since 2020, but also to two straight years of strong investment returns — 8.5% in fiscal year 2023, and 11.5% in fiscal 2024. Last fiscal year's performance placed Connecticut in the top 25% nationally of large public pension funds, Russell said. "When I think about the pension funds, it is so critical," Russell said. By David Krechevsky davidk@hartfordbusiness.com W hen he was growing up in New Haven and West Haven, State Treasurer Erick Russell said, his family didn't have "a lot of resources." "I didn't know much about state government growing up, but I always knew I wanted to do things to be helpful," he said during a recent inter- view with Hartford Business Journal. In particular, Russell wanted to help others who lacked resources. "How do we look at government and make it work for people in a real way, and create opportunities and give people a shot?" he asked. In his nearly two years in office, Russell has taken steps to answer those questions. One of the first was to help negotiate a deal in 2023 to implement Connecticut's first-of-its- kind Baby Bonds program. Enacted by the state legislature in 2021 but delayed by Gov. Ned Lamont, the program seeks to address the racial wealth gap. It auto- matically places $3,200 into a trust for each newborn covered by HUSKY, the state's Medicaid program. According to the treasurer's office, each deposit will be invested and potentially could grow to between $11,000 and $24,000, depending on when the money is accessed, which can be between the ages of 18 and 30. Equally important to Russell is getting the state's pension house in ERICK RUSSELL State Treasurer State of Connecticut Age: 36 Education: Bachelor's degree in criminal justice, University of New Haven; law degree, University of Connecticut School of Law CT STATE PENSION FUNDS' ANNUAL NET INVESTMENT RETURNS TOTAL NET RETURN Source: Treasurer's annual reports and audited financial statements 25% 20% 15% 10% 5% 0% -5% -10% 2017 2018 2019 2020 2021 2023 2022 2024 Continued on next page

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