In this report, the Maryland Public Policy Institute and the Maryland Tax Education Foundation examine the investment fees and investment performance of Maryland’s state pension fund. We compare and contrast these items to those of other state pension funds. A similar report was prepared in 2012.

State pension funds, including Maryland, have succumbed for years to a popular Wall Street sales pitch: “active money management beats the market.” As a result, almost all state pension funds use outside managers to select, buy and sell investments for the pension funds for a fee. The actual result — a typical Wall Street manager underperforms relative to passive indexing — is costly to both taxpayers and public sector employees

Note: Our original version of this report erroneously included North Carolina in the top five states for Wall Street fees. This has been corrected as of July 10, 2013.