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1/6/2026
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Auditor General issues audit report of the Employees’ Retirement System of the State of Rhode Island for the fiscal year ended June 30, 2025
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STATE HOUSE – Net position of the Employees’ Retirement System of the State of Rhode Island (system) increased by $1.1 billion during fiscal 2025 to $14.7 billion at June 30, 2025. The increase was largely due to the significant positive investment returns experienced during the fiscal year.
The financial statements of the system for the fiscal year ended June 30, 2025, and the Independent Auditor’s Report thereon are included in the Annual Comprehensive Financial Report of the system. The audit and related communications were issued by Auditor General David A. Bergantino and released today by the Joint Committee on Legislative Services. The auditors concluded that the system’s financial statements present fairly, in all material respects, the fiduciary net position of the plans as of June 30, 2025, 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 the seven defined benefit pension plans administered by the 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 the defined contribution plan. The defined benefit plans covered more than 90,000 retired, vested or active members, with approximately 45,000 members also participating in the defined contribution plan.
The time-weighted net rate of return, net of investment fees, during the fiscal year was 8.4% (compared to 10.5% during the prior fiscal year), and the net investment income of the pooled investment trust was $1.0 billion (compared to net investment income of $1.1 billion during fiscal year 2024). The system reported total investment expenses of $153.8 million for fiscal 2025.
Benefits paid to retirees and beneficiaries from the defined benefit plans during fiscal 2025 totaled $1.1 billion. Employee and employer contributions totaled more than $861.1 million to all the defined benefit plans. The contribution amount includes $130.2 million contributed for teachers by the state during fiscal 2025.
Employee and employer contributions totaled $159.2 million to the defined contribution plan. Distributions from the defined contribution plan totaled $70.8 million. Amounts accumulated in the defined contribution plan totaled $2.5 billion at June 30, 2025, an increase of 18.1% over June 30, 2024.
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 June 30, 2025, is detailed as follows:
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The Teachers’ Survivors Benefits Trust and Judicial Retirement Benefits Trust have a net pension asset since plan net position exceeds the total pension liability.
The pension liability for all plans except the RI Judicial Retirement Fund Trust (RIJRFT) was determined using the system’s investment return assumption of 7.0%. The RIJRFT used a municipal bond index rate of 5.2%.
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.
In accordance with Government Auditing Standards, we also issued our Independent Auditor’s Report on our consideration of the system’s internal control over financial reporting and our tests of its compliance with certain provisions of laws, regulations and contracts. The audit report included 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. In conjunction with the finding, we provided three recommendations that would enhance the system’s internal controls over financial reporting for the defined contribution plan.
That report also included five management comments which include recommendations to enhance internal control or result in other operational efficiencies.
The Audit Summary, Report of Findings and Management Comments, and a link to the system’s Annual Comprehensive Financial Report are available on the Office of the Auditor General’s website:
Annual Comprehensive Financial Report - ERSRI Fiscal 2025 Annual Comprehensive Financial Report
Audit Summary - ERSRI 2025 Financial Audit - Audit Summary
Findings and Management Comments Report - Findings and Management Comments Report - ERSRI 2025 Financial Audit
For more information, contact:
David Bergantino, CPA, CFE, Auditor General
Office of the Auditor General
Providence, RI 02903
(401) 222-2435, x3020
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