BY THERESA WHITMARSH, EXECUTIVE DIRECTOR OF WSIB

I was honored to be asked to write about the Washington State Investment Board (WSIB) for the Retired Firefighters of Washington's annual newsletter. As firefighters, your job was to protect the lives and property of the residents in your communities. Our job at the WSIB is to protect your hard-earned retirement dollars. My commitment to that objective was reinforced on a personal level shortly after I joined the WSIB. I was in Arizona on business when I went to visit my uncle, a retired Seattle firefighter, who with my aunt is living out his retirement dream in Tucson. Naturally, having a niece now working at the WSIB, one of his first comments to me was "I sure hope you are taking good care of our money."

I am pleased to say that everyone at the WSIB is committed to doing just that. Our mission is to "invest with integrity, prudence and skill to meet or exceed the financial objectives of those we serve." The state Legislature created the WSIB in 1981 as an independent board of trustees to manage investments for the state's various retirement plans and public trust funds with the highest standard of professional conduct for the exclusive benefit of fund participants and beneficiaries.

Today, the Board is chaired by Tacoma city firefighter Pat McElligott, who represents active public safety employees. Other voting members include five public employee pension representatives, a member of the Washington State Senate and a member of the House of Representatives, along with the state Treasurer, director of the Department of Retirement Systems and director of Labor and Industries. Five non-voting members are selected by the 10 voting members for their experience and qualifications in the field of investments. The Board members serve as fiduciaries and are held to the highest standard of professional conduct.

The WSIB's $71.8 billion investment portfolio belongs to 17 separate state retirement plans. This also includes the Deferred Compensation Program to supplement other retirement benefits. In addition, we manage investments for 22 other public funds that support or benefit industrial insurance, colleges and universities, developmental disabilities and wildlife protection.

While the last few years have been extremely challenging, the WSIB's well diversified portfolio was built to withstand the dozens of economic brush fires we've been fighting at the WSIB for the past two years. The assets for the public retirement plans are pooled into a Commingled Trust Fund (CTF), which was established in June
1992 to help control risk and ensure stronger performance overall. Most of the pension systems are strictly defined benefit programs including the 1 and 2 plans for public employees, teachers, law enforcement officers, firefighters, state patrol, volunteer firefighters and judges.

I'm pleased to report the rate of return for the state's retirement CTF ended fiscal year 2010 at 13.2 percent. And our annualized return since establishment of the CTF in
1992 is 8.14 percent. We have outperformed nearly all of our peer pension funds in the United States.

I was appointed executive director of the WSIB in September 2009, as the recession was starting to bottom out. Since then we have seen a fairly steady return in market values with almost $72 billion in total assets under management as of June 30. But it has been a challenging couple of years and we are clearly struggling to stamp out the last of the recessionary embers.

The job of the executive director is to oversee staff, develop and recommend agency and investment policies for Board adoption, and ensure adherence to state policies and laws. I manage a staff of 80 professionals in the areas of investments, information services, accounting and finance and administrative support. Prior to my appointment as executive director, I was the WSIB's chief operating officer for six years, with responsibility for investment operations, technology, research, risk and compliance.

My previous role in state government was with the state Department of Labor and Industries, where I ran the industrial insurance fund, one of the largest workers' compensation funds in the United States. I also spent a number of years in business, working for technology and insurance firms. Heading the WSIB is without question the most challenging, exciting and rewarding job I have had. The state investment board is one of the most respected and well managed pension funds in the country. We are a long-term investor with a proven record of success. We take a disciplined approach to investment with the highest standards of integrity. We are committed to the WSIB's statutory mandate of "maximizing return at a prudent level of risk," and dedicated to working for the best interest of our more than
400,000 beneficiaries.

One of the best ways we can thank firefighters and other public employees for the work they do is to fulfill the promise of adequate and reliable pension benefits when they retire. As executive director of the WSIB I have the responsibility and honor to help make sure that promise is kept.s Newsletter.