The $17 billon dollar fund that supports the pensions of thousands of Alabama state and local government employees and retirees has fared well during the almost eight months of President Donald Trump’s second term.
But Retirement Systems of Alabama CEO David Bronner, who has overseen the fund for more than a half-century, said Trump’s unpredictable tariffs and the detainment of undocumented migrants who are otherwise law-abiding members of the workforce are causing uncertainty in the economy.
“We don’t know what’s going to happen in the near future, so businessmen as a whole just don’t know what to do,” Bronner told the Employees’ Retirement System board at its quarterly meeting Tuesday.
“You don’t have what we would call in the markets consistency. We don’t have stability.”
Marc Green, RSA’s deputy director of investments, said the ERS fund has grown 8.7% this fiscal year, which started Oct. 1. That is slightly better than the 7.99% growth over the last 10 years.
Last fiscal year, the ERS fund paid $1.4 billion in benefits to 60,000 retirees.
The RSA has a larger fund for teachers and education employees, and it shows similar results this year.
The Teachers’ Retirement System fund has grown by 8.54% to $32.9 billion.
The funds are allocated to a diverse mix of stocks, bonds, private placements, real estate, and cash.
The solid performance for the funds follows a record year in 2024.
Green said the market’s resilience has been remarkable.
“It has been astounding considering the daily headlines and how they change the next day,” Green said. “So trying to figure out what your game plan is, it changes by the week or the hour.”
Green said companies face tough decisions about whether to invest in projects because of tariffs and how they will affect the cost of doing business.
Bronner, chief executive officer of the RSA since 1973, said he has known Trump for 30 years and has played golf with the president twice.
“He’ll come up with a good idea, but he tends to overextend it hugely,” Bronner told the ERS Board.
Bronner said an example is Trump’s crackdown on illegal immigration.
He said no one opposes the removal of immigrants who are here illegally and commit crimes and harm people.
“Now, do you do that same thing to the whole workforce?” Bronner said.
“These people who have been here 10 years, 15 years, never did a damn thing except feed their family and work and pay their taxes as legal as you could get, other than they came improperly 20, 30 years ago in some cases,” Bronner said.
The U.S. Supreme Court said Tuesday it would hear a case involving many of Trump’s tariffs in November. Two lower courts have ruled Trump exceeded his authority by imposing tariffs unilaterally under a 1977 emergency powers law.
Bronner noted the high stakes in that case.
“Although the Supreme Court keeps backing up Trump on conservative votes, are they going to back him up on the tariffs?” Bronner said.
“I don’t know. It makes no sense that they would.”
“But then he’s got a real problem. What’s that problem? He’s been collecting billions of dollars from them. He’d have to pay them back if the court rules that you did this illegally. So I don’t know how the Supremes will try to wiggle their way around that one.”
The Trump administration has asked the Supreme Court for an expedited review of the tariffs.
Treasury Secretary Scott Bessent said in the government’s petition to the court that it expects to have collected between $750 billion and $1 trillion in tariffs by next summer, The Wall Street Journal reported.
Bronner singled out one branch of government for not handling its responsibilities.
“You have a Senate in Washington that are simply not doing their job,” Bronner said. “They’re supposed to look over everything for us as American citizens, but they haven’t.”
Bronner told the board members he wanted them to understand the level of uncertainty that could affect the economy and the pension funds.
“I tell you that stuff to make sure you understand that everything’s in flux,” Bronner said.
“From a businessman’s point of view of investing money, why do I want to do anything besides sit?”
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