Office of the
At a Glance
DENISE L. NAPPIER,
Howard G. Rifkin, Deputy
Established – 1639
Statutory authority – State Constitution
Hartford, CT 06106
Average number of full-time employees – 139
Recurring operating expenses –
General Fund: $ 3,365,574
Bond Funds: $ 4,724,163
Pension and Trust Funds: $ 69,098,400
Second Injury Fund: $ 6,800,426
Unclaimed Property Fund: $ 6,717,759
Short-Term Investment Fund: $ 1,270,170
Capital outlay –
General Fund: $ -
Investment Funds: $ -
Second Injury Fund: $ -
Unclaimed Property Fund: $ -
Short-Term Investment Fund: $ -
Assets managed –
Pension and Trust Funds: $ 21.9 billion
Short-Term Investment Fund: $ 4.6 billion
Total abandoned property receipts: $ 222,107,523
Amount returned to owners: $ 33,408,124
Organizational structure – Executive Office; Pension Funds Management Division; Cash Management Division; Debt Management Division; Second Injury Fund Division; Unclaimed Property Division.
serve as the premier Treasurer’s Office in the nation through effective
financial management of public resources, high standards of professionalism and
integrity, and expansion of opportunity for the citizens and businesses of
The Office of the Treasurer was established following the adoption of the Fundamental Orders of Connecticut in 1638. As described in Article Four, Section 22 of the Connecticut State Constitution, the Treasurer shall receive all funds belonging to the State and disburse the same only as may be directed by law.
Denise L. Nappier was sworn in as
the 82nd state treasurer on January 6, 1999, and elected to her second term in
2002 and her third term in 2006. The
first African- American woman elected state treasurer in the
The Treasurer is an ex-officio member of the following boards, commissions and legislatively-mandated committees: Banking Commission, Connecticut Development Authority, Connecticut Health and Educational Facilities Authority, Connecticut Higher Education Supplemental Loan Authority, Connecticut Housing Finance Authority, Finance Advisory Committee, Investment Advisory Council, Connecticut Lottery Corporation, Standardization Committee, State Bond Commission, State Information and Telecommunications Systems Executive Committee, Connecticut Higher Education Trust Advisory Committee, Student Financial Aid Information Council, Connecticut Student Loan Foundation Board, and Council of Fiscal Officers.
The Treasurer is responsible for the safe custody of the property and money belonging to the State by receiving all money belonging to the State, making disbursements as directed by Statute, and manages, borrows, and invests all funds for the State. State revenue is received into the Treasury each year which covers the State’s disbursements. The Treasurer is also responsible for prudently investing the State pension and trust fund assets along with the State, State Agencies and local governments’ short-term investments funds and assets in the Connecticut Higher Education Trust. The Treasurer maintains an accurate account of all funds through sophisticated security measures and procedures.
The Office of the Treasurer during fiscal year 2010 achieved a number of substantial goals that will benefit state residents and businesses, including:
Sale of Unclaimed Securities generates Millions for Connecticut’s General Fund – Approximately $151 million has been generated from the sale of unclaimed securities during fiscal year 2010 and deposited into the State’s General Fund until the rightful owners come forward to claim their money – far exceeding the budgeted projection of $52 million.
Second Injury Fund Assessment Rates
– 2010 marks the twelfth consecutive year in which the Treasurer has been able
to either reduce or maintain the assessment rate for
In addition, since the beginning of Treasurer Nappier’s administration in 1999, unfunded liabilities of injured workers have declined by 48.8% from $838 million to $426.8 million as June 30, 2010.
Bond Sales Produce Debt Service Savings - Significant debt service savings were achieved by refunding existing debt to lower interest rates and by taking full advantage of the new Build America Bonding program authorized under the federal stimulus bill. During fiscal year 2010, the Debt Management Division issued $258.2 million of General Obligation refunding bonds, $49.8 million of Special Tax Obligation refunding bonds, $36.1 million of UConn 2000 refunding bonds and $115.8 million of Clean Water Fund refunding bonds. Since January 1999, debt refunding and defeasances have produced $645 million in debt service savings. In addition, during the year the Division also completed the issuance of $938.3 million of Build America Bonds in three series which provided $44.3 million in debt service savings over the life of the bonds when compared to traditional tax-exempt bonds.
Recovery from Claims and Litigation
- In 2000, the Treasurer initiated a multi-faceted effort to prevent losses due
to the malfeasance of others and, whenever possible, to recover lost
assets. This effort has included the
negotiation of best practices contract terms, monitoring of contract
obligations, the filing of claims, and managing
In the fiscal year that ended June 30, 2010, the Office of the Treasurer recovered $5.8 million in class action lawsuits. The Treasury has regained a total of $36 million since 2000 by closely monitoring and participating in class action settlements.
Cash Management Division –
Investment Fund – As of June 30, 2010, the Cash Management Division’s
Short-Term Investment Fund (STIF) achieved an annual return of 0.34 percent,
exceeding its primary benchmark by 0.25 basis points, thereby earning an
additional $11.9 million in interest income for
At the end of the fiscal year 2010, STIF had more than $4.5 billion in assets under management. Municipalities opened 48 new STIF accounts, bringing the total number of municipal accounts to 656. Standard & Poor’s reaffirmed STIF’s AAAm rating, the highest rating available, and STIF’s annual report received the Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association.
Longer-Term Investment Portfolios – In addition to STIF, the Treasury manages two investment portfolios with longer-term investment horizons for stable balances of the state’s operating cash. The funds – STIF Plus and the Extended Investment Portfolio – earned an additional $5.0 million for the state during the fiscal year.
Community Bank and Credit Union Initiative – Pursuant to CGS 3-24k, the Treasury continues the Community Bank and Credit Union Initiative, which supports Connecticut-based banks and credit unions with assets not exceeding $500 million through investments in institutions’ certificates of deposit. During fiscal year 2010, a monthly competitive bidding process was held through which $93.5 million was invested with 2 community banks and 1 community credit union at an average interest rate of 0.34 percent and now has 11 banks and 1 credit union signed up for the initiative with $338.5 million invested at an average yield of 2.70 percent through June 30, 2010. Monthly competitive bidding continues with 12 financial institutions eligible to bid.
Cash Management Operations – The Cash Management Division works with State agencies to improve the efficiency of the State’s cash management program by: accelerating state agency receipts via electronic payments and the Internet, streamlining the flow of funds between concentration accounts and individual disbursement accounts to reduce manual processes and increase invested funds, speeding the flow of bank information to State agencies, consolidating bank accounts to reduce service fees and unproductive balances, and increasing the use of electronic payments to vendors, towns and individuals. For example, during the year, we completed a competitive bidding process with the Labor Department for banking services to support the payment of unemployment benefits by direct deposit and the use of debit cards. That initiative will save the state in excess of $4 million annually in administrative costs.
Debt Management Division
During fiscal year 2010, the Debt Management Division, which manages $19.2 billion in total debt outstanding as of fiscal year-end, issued $1.7 billion of new money bonds for capital projects and $915.8 million of Economic Recovery Notes. As interest rates continued at relatively low levels during the year, the Division issued $258.2 million of General Obligation refunding bonds, $49.8 million of Special Tax Obligation refunding bonds, $36.1 million of UConn 2000 refunding bonds and $115.8 million of Clean Water Fund refunding bonds. In addition, the Division issued $353.1 million of GO bond anticipation notes to refund maturing notes.
Since January 1999, debt refundings and defeasances have produced $645 million in debt service savings.
The Division focused on several important challenges during the fiscal year, including: the evaluation of the most prudent financing options to assist the Legislature with the projected budget deficits created by a national economic recession, maintaining proactive communications with the credit rating agencies regarding the State’s fiscal situation, and taking full advantage of the savings offered by the new Build America Bonding program and other opportunities authorized under the federal stimulus bill.
The Division moved quickly to execute the sale of $915.8 million of Economic Recovery Notes to fund the 2009 budget deficit, bringing in needed cash to the State’s General Fund. The Division then worked closely with the Treasurer and the Office of Policy and Management on the required joint report to the Legislature evaluating financing options to fund the projected 2011 budget.
The Division completed the issuance of $938.3 million of Build America Bonds in three series which provided $44.3 million in debt service savings over the life of the bonds.
The Division worked closely with other major State agencies on financial matters, including the Departments of Environmental Protection and Public Health on deploying 100% of the federal stimulus funding, the Department of Transportation on transportation funding options, rating agency reviews, refunding options for Bradley Airport, and assisting the University of Connecticut with its bond issues.
The Division is actively involved with several boards and quasi-public agencies on behalf of the Treasurer. The Division consulted with the Connecticut Health and Educational Facilities Authority on a proposed electronic medical records financing program and with the Connecticut Development Authority on various new bonding options included in the federal stimulus bill.
Pension Funds Management Division
The Connecticut Retirement Plans and Trust Funds as of June 30, 2010 had $21.9 billion in assets under management. The three largest plans Teachers’, State Employees’, and Municipal Employees’ had assets totaling $12.3 billion, $7.8 billion and $1.5 billion respectively. One-year performance (net of fees) in an unsettled bear market for Teachers’, State Employees’, and Municipal Employees’ was 12.87 percent, 12.93 percent, and 12.57 percent, respectively.
Early in the fiscal year, a permanent Chief Investment Officer was hired and the newly created position of Deputy Chief Investment Officer was filled.
The implementation of the Alternative Investment Fund (AIF) was completed, including a structure review of the asset class and the conclusion of the first phase search in which five absolute return fund of hedge fund managers were named as preferred vendors.
Through investment in the Real Estate Fund, the CRPTF participated in the Public-Private Investment Program, or PPIP a U.S. Treasury opportunity designed to repair the capital markets by investing in legacy, distressed residential and commercial mortgage-backed securities and loans. Three firms were hired to manage a total investment commitment of $200 million. The Private Investment Fund committed $175 million to 2 private equity funds. A competitive search was completed for the Emerging Markets International Stock Fund.
Corporate Governance / Proxy Voting
Through shareholder activism, the pension fund seeks to protect and improve upon the value of its investments by advocating that companies in which the pension fund invests improve their corporate governance practices. The Office has engaged in corporate governance activities on a number of fronts, from writing letters and engaging in dialogue with companies, to filing shareholder resolutions on a unilateral basis or through alliances with other institutional investors. The Treasurer also regularly submits comments to the Securities and Exchange Commission (SEC), the U.S. Congress and the stock exchanges on corporate governance policy issues that may affect the CRPTF.
During fiscal year 2010 the Treasurer’s Office focused on key corporate governance issues, including executive compensation, election of members to boards of directors, climate change, and shareholder rights. Overall, the (CRPTF) filed or co-filed 16 shareholder resolutions and engaged with more than 30 companies. Twelve of the resolutions filed by the CRPTF for the 2010 proxy season focused on aspects of executive compensation, 2 addressed energy and climate change and 2 were on general corporate governance issues. Successful engagements led the CRPTF to withdraw 10 of the 16 resolutions
During 2010, the U.S. Congress considered extensive changes to legislation regarding corporate governance as part of the financial reform legislation that was signed into law by the President on July 21, 2010. The Treasurer’s Office actively followed the development of this legislation and communicated directly with our national elected officials on crucial issues. The final legislation includes significant enhancements for shareholders.
The Treasurer’s Office also continued to provide comments to the SEC on proposed regulations, as well as encourage the SEC to develop policies beneficial to investors in fiscal year 2010. One major success this year was the SEC’s new rule requiring all companies to enhance their disclosure on the financial impact of climate change on the company in their annual SEC filings.
Executive compensation was a major focus of the CRPTF during the 2010 proxy season. The Treasurer addressed executive compensation on a number of fronts, including advocating an annual advisory vote on executive compensation at all companies (“Say on Pay”), calling for curbs on use of executive stock for speculative trading, working with several portfolio companies to adopt policies related to severance payments, and requesting policies requiring equity compensation be held for at least two years after retirement. The CRPTF also voted NO on several advisory votes on executive compensation, and voted against the election of compensation committee members at several companies due to poor compensation practices.
In the area of climate change and related energy issues, the Office continued to take a leading role in the Investor Network on Climate Risk (INCR) and the Global Warming Shareholder Campaign (GWSC). The Treasurer engaged with a number of companies on these issues to set greenhouse gas emission goals and targets for energy use reductions and report to shareholders on progress in achieving those targets.
As part of its corporate governance
practices, the Treasurer is charged with enforcing the state law relating to
religious non-discrimination practices in the workplace. This law is based on
the MacBride Principles, which are a corporate code of conduct for companies
doing business in
continues to monitor and communicate with companies doing business in
Bharat Heavy Electricals Ltd. (BHEL)
China Petroleum and Chemical Corp.
Dongfeng Motor Corporation
Nam Fatt Corp
Oil and Natural Gas Corp (ONGC)
PetroChina Co. Ltd.
Petronas Capital Ltd.
Sinopec Shanghai Petrochemical Corp.
The value of CRPTF’s combined investments in those companies at the time of divestment was approximately $15 million.
Unclaimed Property Division
During fiscal year 2010, the Unclaimed Property Division returned $33 million to about 17,000 rightful owners, an accomplishment representing the largest amount of dollars returned by the Division, while the Division received $71 million in unclaimed property receipts voluntarily reported by holders. Unclaimed Property also sold securities in accordance with Connecticut General Statutes section 3-68a (d); the total deposit to the State General Fund from these sales was $151 million. Connecticut General Statute section 3-69a (2) required the Unclaimed Property Division to deposit $18 million into the Citizens’ Election Fund and the balance into the General Fund.
same period, 64,924 claims were filed, 504,951 searches for abandoned property
were performed through the website and 47,820 telephone
inquires were answered. On October 30, 2009 the Unclaimed Property
Division published a 104 page supplement in 16 newspapers and purchased ads in
12 community papers and business journals across
The Second Injury Fund provided $38 million in indemnity, medical and settlement payments to injured workers in Fiscal Year 2010. The number of injured workers receiving bi-weekly benefits is now 326 compared with 353 a year ago.
The Fund assessment rate will remain at 2.75%
for insured employers in Fiscal Year 2011, and the rate for self-insured
employers will decrease from 3.84% to 3.25% beginning January 1, 2011. In
keeping with a commitment to improve the economic well-being of the State and
its businesses, 2010 marks the twelfth consecutive year in which the Second
Injury Fund has either reduced or maintained the assessment rate, the longest
period without an assessment rate increase in the history, of the Fund. Total savings to
As of June 30, 2010, the Fund’s open claim inventory is 2,534. During this same period reserves (estimated future payments) for all open claims as of June 30, 2010 are $426.8 million, a reduction of $10.8 million from a year ago and a reduction of $410 million (49%) from 1999.
The Treasurer is trustee for
to demonstrate significant new account growth during fiscal year 2010,
increasing the number of new account accounts by approximately 9.6% over the
previous year from 86,559 at June 30, 2009 to 94,886 at June 30, 2010. 89.4% of the new accounts increase was from
CHET offers customers eight different investment options. At the end of 2010 fiscal year, the Managed Allocation Option remained the most actively utilized investment option in the CHET program capturing 57.8% of total program assets, while 15.6% of assets were invested in the High Equity, 13.7% in the Principal Plus Interest Option, 4.6% in the 100% Equity Index Option, 4.7% in the Aggressive Managed Allocation Option and 3.6% combined in the 100% Fixed Income Money Market and Social Choice Equity Options.
Treasurer Nappier is committed to using the Office of the State Treasurer as a catalyst for financial education and asset wealth building programs that provide greater economic security and opportunity for all segments of the population. The Office has forged partnerships with community organizations, foundations, state agencies and the private sector to develop initiatives to increase financial literacy and to improve access to financial education tools and resources.
In fiscal year 2010, the Treasurer continued her longstanding commitment to youth financial education by supporting the efforts of the CT Jump$tart Coalition for Youth Financial Literacy, of which she is a founding member. In May 2010, Connecticut Jump$tart hosted the fifth annual forum at Quinnipiac University for over 500 high school students, featuring workshops, free financial materials, and a day-long personal finance program.
Another key priority for the Treasurer’s
office is its continued partnership with the YWCA of the Hartford Region as
co-hosts of the annual Money Conference for Women. In fiscal year 2010, the eighth annual Money
Conference for Women was attended by over 400 women. This free daylong
conference presents money management strategies in a conference environment for
women of all ages, incomes and levels of financial knowledge, led by recognized
leaders in the financial services industry. The Money Conference has provided
free financial assistance to thousands of
This past fiscal year, the Treasurer’s Office collaborated with the Connecticut Association of Human Services (CAHS), the Connecticut Appleseed Foundation, and the Connecticut Department of Banking to develop a statewide initiative to support the participation of unbanked and underbanked households into mainstream financial services and to develop products as a vehicle to promote savings and assets. Credit Unions, banks, and non-profits are represented on the steering committee of this initiative which plans to launch a statewide “Bank On” campaign this next fiscal year.
The Office also participated in the
Connecticut Money School, a free financial education program that features
online registration and classes taught by professional volunteers in community
based settings for the general public. Since the
Information Reported as Required by State Statute
In compliance with Connecticut General Statutes Section 46a-78, the Treasurer annually submits an affirmative action program to the State Commission on Human Rights and Opportunities. The Office pledges to make every good-faith effort to achieve all objectives, goals and timetables in its affirmative action plan. Contracts, leases and purchase orders of the Treasurer’s Office contain clauses requiring non-discrimination and vendors are required to certify the same. The Treasurer’s Office under this administration has consistently met or exceeded annual Set-Aside Program goals.