Audit  Audit of the Pension Reserves Investment Management Board

In accordance with Section 12 of Chapter 11 of the Massachusetts General Laws, the Office of the State Auditor has conducted a performance audit of the Pension Reserves Investment Management (PRIM) Board for the period July 1, 2019 through January 15, 2022. In this performance audit, we examined the PRIM Board’s compliance with its Investment Policy Statement by investing between 5%–10% of all its investments with emerging managers.¹ We also determined whether the PRIM Board developed a plan to ensure that not less than 20% of its investment managers² are owned by minorities, women, or people with disabilities,³ in accordance with Section 23(8)(a–c) of Chapter 32 of the General Laws.

Our audit revealed no significant instances of noncompliance by the PRIM Board that must be reported under generally accepted government auditing standards.

1.    According to the PRIM Board’s Investment Policy Statement, emerging managers are “investment managers with less than $2 billion of assets under management that may have shorter track records or investment managers that are minority-owned or women-owned.” Assets under management refers to the total amount of money that an investment manager manages for its clients.

2.    According to the PRIM Board’s Investment Policy Statement, “PRIM employs professional investment managers [also called investment management companies] and gives them discretion, consistent with specified objectives and guidelines, to manage the [Pension Reserves Investment Trust] Fund’s assets.”

3.    The PRIM Board refers to investment managers that are owned or led by minorities, women, or people with disabilities as diverse managers. Investment managers that are minority-owned or woman-owned are also considered emerging managers, as previously stated.