A new national study found that many state pension systems over-invest in their own states and lose money, but Maryland is not one of them.

The study, published earlier this month by two faculty members at Northwestern University’s Kellogg School of Management, looked at whether state pension systems seemed to be biased toward making investments in their own states. The study found that when states keep their pension investment dollars close to home, they tend to lose more.

The study authors figured out what percentage of investments nationwide were made in each state. They compared that to the percentage of investments each state pension fund made at home. According to the report, 0.93% of all pension investments nationwide are made in Maryland. However, the Maryland State Pension and Retirement System puts 3.3% of its investments in Maryland entities.

With an “over-investment” of about 2%, Maryland was below the median for the amount invested in its borders.

Some other states invested much larger portions of their funds in home-state businesses. Massachusetts, for example, has put more than 40% of its pension investments into firms and entities headquartered there. While Massachusetts has several large corporations based in its borders, the study found that it had placed almost 25% too much of its investments in Massachusetts instruments.

Maryland State Retirement and Pension System spokesman Michael Golden said that the system’s board has a policy against “economically targeted investments” – those designed to help a certain area. So this is not an issue for the state.

There are investments in Maryland entities, however.

“There’s Northrop Grumman, and they’ve got a presence in Maryland,” Golden said. “And there’s Black & Decker. Because we’ve invested there, it doesn’t mean that they are local companies. It means they’re just good investments.”

—Megan Poinski