Federal financial regulators have ended an investigation into whether Rhode Island misled investors in its public pension system and will not pursue any punitive actions, state General Treasurer Gina Raimondo announced Tuesday.
The U.S. Securities and Exchange Commission began reviewing the state's pension system in 2011 as part of a broader look at financial disclosures in several cities and towns. The probe focused on financial disclosures from 2007 to 2011 that are required to be made to investors in the pension system covering state workers, teachers and many municipal workers and retirees.
While the SEC did not provide the state with any information on why it ended the review, the agency's decision not to seek any enforcement action removes "any cloud that lingered over our pension disclosure," said Raimondo, a Democrat.
"Our pension practices are transparent, our disclosure is accurate, and our pension system is on a firm foundation," Raimondo said in a statement announcing the end of the investigation.
A spokesman for the SEC said the agency does not confirm the beginning or ending of investigations. Raimondo's office was notified last week in a letter from the agency that the investigation had been completed.
Following a similar investigation into Illinois' pension system, the SEC alleged that the state made misleading statements to investors about the effect of pension reforms and understated problems with the state's retirement system. The state agreed to settle the charge earlier this year.
Since the investigation began Rhode Island has changed its financial disclosure policies and now gives investors much more information about the health of the pension system, according to Joy Fox, a spokeswoman for Raimondo.
Two years ago state lawmakers passed sweeping changes to the state pension system to save billions in unfunded pension obligations in future years by freezing pension increases, raising retirement ages and creating a new benefit program that combines a traditional pension with a 401(k)-like retirement savings account.