But even as many retirees in the Ocean State have experienced benefit cuts, the Benchmark Financial report contends that hedge fund managers are earning rich fees that could otherwise be used to shore up the state’s pension. A recent report in The Providence Journal said investment expenses at the pension were $70 million for the year that ended June 30. Earlier estimates had investment expenses amounting to around $11.5 million for the period, the Benchmark report said.

It is well known that hedge funds charge much higher fees than other money managers. The alternative investments in the Rhode Island pension charge management fees of as much as 2.5 percent and performance fees of up to 20 percent of profits. Transaction costs are additional.

Unfortunately, the hedge funds held by the state have underperformed the overall stock market so far this year. As of Aug. 31, the most recent data available, the Rhode Island State Investment Commission said its 10 hedge funds investing in stocks returned an average of 8.73 percent, while nine so-called real-return hedge funds generated 3.61 percent. Neither matched the 16.15 percent gains in the Standard & Poor’s 500-stock index during the period.

Asked about the problems highlighted in the Benchmark report, Ms. Raimondo, through a spokeswoman, declined to be interviewed. But in a news release, Ms. Raimondo’s office said the report was motivated by her political enemies.

Edward A. H. Siedle, the president of Benchmark Financial Services in Ocean Ridge, Fla., conducted the investigation into the Rhode Island pension’s investments. A former lawyer at the Securities and Exchange Commission, Mr. Siedle said he found it troubling that state officials won’t require the hedge fund managers they have hired to disclose how they are investing the pension’s money. He also noted conflicts of interest common at hedge funds that may put the Rhode Island pension at a disadvantage to insiders or favored investors.

A review of documents from three of the hedge funds managing money for the Rhode Island pension fund show that some investors are more equal than others. Special treatment includes fee discounts, more frequent redemption rights than those given to other investors and the ability to receive reports including information about the fund’s portfolio that is not provided to other shareholders.

“The hedge fund documents all say that ‘We’re not going to disclose what we are doing with your money,’ ” Mr. Siedle said. “However, they say that certain strategic investors will be told what’s being done with your money and that those strategic investors may use that information to profit at your expense.”