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Retirement Systems of Alabama

Mark Fagan, Professor Emeritus, Jacksonville State University
RSA Headquarters
The Retirement Systems of Alabama (RSA), headquartered in Montgomery, Montgomery County, has the fiduciary responsibility to provide retirement and disability benefits to public employees and public educators in Alabama. RSA includes the Teachers' Retirement System (TRS), the Employees' Retirement System (ERS), and the Judicial Retirement Fund (JRF). Each system is a separate state unit for financial reporting purposes. The TRS has a Board of Control and the ERS and JRF have a combined Board of Control. In addition to executive management, the TRS, ERS, and JRF share investment management, accounting, and information system services. RSA also administers health insurance for TRS members through the Public Education Employees Health Insurance Plan (PEEHIP).
The TRS was established by Act 419 of the Alabama State Legislature in 1939 to provide benefits to qualified persons employed by state-supported educational institutions. The ERS was established by Act 515 in 1945 to provide benefits to state employees, state police, and, on an elective basis, to qualified persons of cities, towns, and quasi-public organizations. The JRF was established by Act 1163 in 1973 to provide benefits to qualified judges, justices, clerks, and other court personnel. The objective of RSA is to accumulate sufficient assets during a member's employment through employer and member contributions and investments to finance the member's benefits throughout retirement. RSA assets are pooled for investment purposes.
David G. Bronner
David G. Bronner, formerly of the University of Alabama School of Law, became the fourth secretary-treasurer at RSA in 1973. Then, Alabama Education Association (AEA) president Paul R. Hubbert was chair of the TRS Board and Gov. George C. Wallace was chair of the ERS Board. Bronner was selected from a pool of 100 applicants. At that time, RSA had 55 employees, 97,002 active members, and 14,936 retired members. RSA had $623 million in funds under management and $1.5 billion in accrued liabilities (25-percent funded). RSA made $33 million in investments and paid $40 million in benefits.
Bronner oversees all of RSA's 360 employees for operations, investments, and accounting. Under Bronner's tenure, by the end of fiscal year (FY) 2019 RSA was managing $42 billion in 24 funds. RSA's income was $3.1 billion from employer contributions, employee contributions, and investments. RSA covered 1,212 employer units spanning 162 state agencies, 296 cities, 65 counties, 513 other public entities, 13 universities, 25 postsecondary institutions, and 138 K-12 schools. RSA had 368,566 members: 219,257 active and 149,309 retired. RSA paid $3.4 billion in benefits with $3.1 billion paid to members in Alabama.
RSA Buildings in Mobile
RSA's long-term investment strategy includes diversifying assets to spread risk and minimize large losses. RSA reduces investment costs dramatically by having investment professionals on staff. At the end of FY 2019, RSA held assets in 24 countries and included domestic stocks, international stocks, bonds, securities, and real estate. RSA's commercial real estate assets total 15 million square feet.
RSA owns the largest commercial office building in New York City (55 Water Street) with some of the world's most widely recognized corporations as tenants. They include Hugo Boss, S&P Global, and Legg Mason, the Teachers' Retirement System of NYC, the NYC Department of Transportation, Liberty Mutual Insurance Company, NYC Health and Hospital Corp., and the Depository Trust Clearing Corporation (DTCC). DTCC processes trillions of dollars of securities trades daily for more than 50 exchanges and equity platforms in global financial markets.
Investing in Alabama
RSA Buildings in Montgomery
Since 1973, RSA's philosophy has been that making Alabama's economy stronger makes RSA financially stronger. The agency has invested billions of dollars in housing, hospitals, office buildings, golf courses, resort hotels, restaurants, spas, retail outlets, and manufacturing plants all over Alabama. RSA owns seven parking decks and the following properties in Montgomery, Montgomery County: Alabama Community College System Building (1977); RSA Plaza (1991); Alabama Center for Commerce (1991); RSA Union (1995); RSA Tower (1997); Helen Hunt Early Learning Center (1998); RSA Activity Center (1998); RSA Pavilion Park (1999); RSA Criminal Justice Center (2002); RSA Headquarters (2008); Performing Arts Center (2008), and RSA Dexter Avenue Building with Datacenter and Internet Hub (2011). RSA buildings are rented to 59 state agencies (more than any other landlord). RSA owns three parking decks and four buildings in Mobile: RSA Battle House Tower (2006); RSA Trustmark Building (2011); RSA Van Antwerp Building (2015); and RSA Dunbar Building (2018).
Ross Bridge Resort & Spa
Since 1990, RSA has developed the Robert Trent Jones Golf Trail in Alabama with 11 sites (468 golf holes) encompassing 26 courses, eight resort hotels/conference centers (2,200 rooms), and six spas. The Trail runs from the Appalachian Mountains in north Alabama to the Gulf of Mexico and is the largest golf course construction project in the world. Trail golf complexes spurred on adjacent property the construction of some 8,000 houses and more than five million square feet of commercial space. The Trail has increased annual tourism spending since 1990. By 2019, there was an annual increase of $14 billion. Additionally, it has increasingly attracted retirees to Alabama. Thousands of jobs have resulted from this investment, and the taxes from increased annual tourism are a significant financial resource for Alabama.
In 1996, RSA invested in Ellis Communications, a television and radio company which was renamed Raycom Media with 12 television stations and two radio stations. In 1997, RSA made a loan to Community Newspaper Holdings, Inc. (CNHI), a newspaper publisher with 45 daily/weekly newspapers in 11 states. Raycom and CNHI continued to expand and by 2019, Raycom owned or provided services for 45 television stations in 21 states and CNHI had newspapers in more than 200 communities. These financial arrangements gave RSA $50 million a year in free advertising for Alabama. In 2019, Gray Television bought Raycom for $3.65 billion, agreeing to provide $30 million in free ads per year for RSA for 10 years. Gray operates the top stations in 92 U.S. television markets with 142 television stations (Fox, CBS, ABC, and NBC), making it the third largest broadcaster in the nation, reaching 24 percent of households. RSA still owns CNHI's 100 newspapers around the nation and continues to enjoy their free publicity.
Since 1998, RSA partnered with the Daniel Corporation to develop four senior housing compounds (933 independent living and assisted-living units) in Birmingham, Jefferson County; Huntsville, Madison County; and Mobile, Mobile County. In 2006, RSA began developing National Village in Opelika, Lee County, (700 acres) and The Colony at The Grand in Fairhope, Baldwin County, (734 acres) as resort and retirement communities.
Mercedes Plant in Vance
RSA has partnered for the last 30 years with state government, utility companies, and industrial leaders for major economic development projects in Alabama. RSA financed or recruited companies in the following industries: automotive, aerospace, biotech, information technology, distribution, metals, chemical, forestry products, electronics, plastics and rubber, railcar manufacturing, oil and gas, maritime, and agribusiness. RSA played a major role in bringing Mercedes-Benz to Tuscaloosa, Tuscaloosa County, in 1994 and Airbus to Mobile, Mobile County, in 2012. In 2009, RSA developed Alabama Rail Car, one of the world's largest rail car manufacturing plants, in northwest Alabama and the following year financed the Shops at Grand River in Leeds, Jefferson County, as the anchor for a 6,500-acre planned community with residential, shopping, and entertainment facilities. In 2012, RSA financed SiO2 Materials Science in Opelika. The U.S. government's Operation Warp Speed COVID-19 response effort selected SiO2 to provide viles for COVID-19 vaccines and therapeutics.
Much of the growth at RSA over the last 47 years and many of the positive impacts from RSA's investments in Alabama would not have happened without Bronner's leadership. RSA has developed amenities in Alabama to make the state competitive for economic development. Continued contributions from employers and employees along with positive investment returns are needed to maintain RSA's healthy funded ratio and provide adequate benefits. Constant efforts to resist attempts to gain control of RSA funds, reduce contributions, and reduce benefits are required to maintain RSA's status as a stable retirement fund for Alabama's public employees.

Additional Resources

Fagan, Mark. The Robert Trent Jones Golf Trail: Its History and Economic Impact. Montgomery, Ala.: NewSouth Books, 2016.
Fagan, Mark. Alabama's Public Pension Fund Growth and Economic Expansion since 1973. Pennsauken, N.J.: BookBaby, 2019.
Published:  October 23, 2020   |   Last updated:  October 12, 2020