The Maryland State Retirement and Pension System board tapped a top aide to Treasurer Nancy K. Kopp to be the system’s chief investment officer Monday.
A. Melissa Moye had served as acting CIO since October in addition to her role as deputy treasurer for financial policy.
She will oversee the investments of a $36 billion system that has become a greater concern among lawmakers in recent years as future obligations have steadily outpaced the funds it has available to pay them.
Kopp, who chairs the pension system’s board of trustees, said Moye would maintain the “financial health and sustainability of the system far into the future.”
“Over the last 10 months, Dr. Moye has served the retirement system and its beneficiaries with great skill and prudence as the acting CIO,” Kopp said in a statement.
Indeed, fiscal 2011, which ended June 30, was a strong year for the retirement system. The system’s investments grew $6 billion to $37.5 billion. The 20 percent increase easily outpaced the 14 percent rate in 2010, which came after years of declines during the Great Recession.
Much of that 2011 growth, however, was due to strong gains in the stock market. Public equity investments, which account for 47 percent of the fund, posted 29 percent growth that year. The fund’s investments are directly managed by private firms.
The pension system’s final 2011 report, which will show how the system is positioned to cover future obligations, is not due out until December.
MSRPS spokesman Michael D. Golden said the system did not yet have month-end figures for August, when the system was again rocked by wild swings in the stock market.
“We live in challenging times, and I appreciate the confidence and trust that the Board of Trustees and all our members have placed in me and our team,” Moye said.
After being fully funded a decade ago, the pension system’s balance sheet began to slip, holding enough to cover 82.8 percent of its future obligations in 2006 and 80.4 percent in 2007. The slide was exacerbated by the recession and the funding level dropped to 64.1 percent in fiscal 2010.
To ease the strain on the fund, lawmakers lessened the state’s pension obligations this year. Among other changes, they raised employee contribution rates, lengthened the vesting period for employees and capped cost-of-living adjustments at 2.5 percent during years when investment return targets are hit.
A commission headed by former House Speaker Casper R. “Cas” Taylor Jr. is studying further options, and Senate leaders have been pushing a major change that would shift some of the state’s obligation to pay teacher pensions to the counties.
Moye, who has a Ph.D. in economics from the University of Notre Dame, was chief economist at Amalgamated Bank’s Trust & Investment Services from 2001 to 2005, and director of investment until 2007.
She served on the MSRPS board from 2003 to 2007 and became acting CIO in October after Mansco Perry III took a job with Macalester College in Saint Paul, Minn.