Auditor General releases annual audit of
the Employees’ Retirement System


STATE HOUSE – Net position of the Employees’ Retirement System of the State of Rhode Island (the Retirement System) decreased by $620.2 million during fiscal 2022 to $11.6 billion at June 30, 2022. The decrease was largely due to negative investment returns and the normally expected payment of benefits. 

The financial statements of the Retirement System for the fiscal year ended June 30, 2022, and the independent auditor’s report thereon are included in an audit report issued by Auditor General Dennis E. Hoyle and released today by the Joint Committee on Legislative Services. The auditors concluded that the financial statements of the Retirement System present fairly, in all material respects, the fiduciary net position of the plans as of June 30, 2022, and the changes in fiduciary net position for the year then ended in conformity with accounting principles generally accepted in the United States of America.

The audit encompassed (1) the seven defined benefit pension plans administered by the Retirement System – i.e., separate plans for state employees and teachers, the teachers’ survivors benefit program, two plans covering state police, two plans covering judges, and participating municipal employees, and (2) the defined contribution plan. The defined benefit plans covered more than 73,000 members (more than 40,000 of these members also participated in the defined contribution plan).

The time weighted rate of return during the fiscal year was -1.4% (compared to 25.6% during the prior fiscal year), and the net investment loss of the pooled investment trust was $278.6 million (compared to net investment income of $2.3 billion during fiscal year 2021). The System reported total investment expenses of $166.7 million for fiscal 2022.

Benefits paid to retirees and beneficiaries from the defined benefit plans during fiscal 2022 totaled $1.0 billion, and distributions from the defined contribution plan totaled $46.3 million. Employee and employer contributions totaled more than $822.4 million to all the defined benefit plans including a one-time State appropriated contribution of $62 million to eliminate actuarial liabilities associated with pension deferral in fiscal years 1991 and 1992. Employee and employer contributions totaled $139.8 million to the defined contribution plan.

Amounts accumulated in the defined contribution plan totaled $1.5 billion at June 30, 2022. Most defined contribution plan assets (89%) are held in target date retirement fund investments.

The accounting measures of the net pension liability (GASB Statement No. 67) used for financial reporting differ from the measures used to determine actuarially determined contribution amounts for funding purposes.  Employers participating in the System’s plans report the net pension liability (asset), or their proportionate share, on their government-wide financial statements as required by GASB Statement No. 68 - Accounting and Financial Reporting for Pensions.

Each plan’s fiduciary net position as a percentage of the total pension liability, determined as of the June 30, 2022 measurement date, is shown below:

ERS – State employees                                    59.6%

ERS – teachers                                                 62.1%

Teachers’ Survivors Benefits                        177.7%

SPRBT – State police                                      90.4%

JRBT – Judges                                                101.1%

RIJRFT – Judges                                                7.4%           

SPRFT – State Police                                         14.9%

MERS – general employees                               88.5%

MERS – police and fire                                      85.0%


The Teachers’ Survivors Benefit Plan (TSB) and Judicial Retirement Benefit Trust have a net pension asset since plan net position exceeds the total pension liability.

The pension liability for all plans except the RIJRFT was determined using the System’s investment return assumption of 7%. The RIJRFT used a municipal bond index rate of 3.69%. These accounting measures of the net pension liability or asset differ from amounts included in actuarial valuations for determining annual required contributions.

The audit report also includes information on the net pension liability (asset) of the plans over time as well as the employer contributions made to each plan compared to actuarially determined amounts. 

The auditors also reported a finding related to the defined contribution plan which is administered by an external entity and is not subject to controls and processes in place for the defined benefit plans. The auditors recommended that the System enhance its oversight of the defined contribution plan and consider modifying the existing contribution and benefit system to also capture employee and employer contribution data for the defined contribution plan.

The audit report and audit summary are available on the Office of the Auditor General’s website,