TULSA, Okla. (AP) - Oklahoma's two public pension funds have only a small portion of their portfolios invested in troubled banking institutions and aren't in any danger, officials say.
For the short term, from one to three years, the Oklahoma Teachers Retirement System and the Oklahoma Public Employees Retirement System are fine, Tommy Beavers, executive director of the Oklahoma Teachers Retirement System said.
Beavers said he would become concerned if present conditions lingered 10 to 15 years.
The teachers retirement system has about 150,000 members, with about 45,000 of them retired. OPERS has about 70,000 members with 26,000 retired.
“These pension funds are backed up by the full faith and credit of the state of Oklahoma,” said Tom Spencer, executive director of OPERS. “They are not like other retirement accounts that might be tied to how well stocks and other investments perform.”
Even so, the pension funds' worth has been falling along with the stock market, leaders indicate.
The failure of Lehman Brothers Holdings and problems encountered by J.P. Morgan, the system's custodian bank, put at stake only $42 million of the teachers system's $8 billion fund, Beavers said.
“Assuming that we lost 100 percent of that $42 million, it would represent less than one-half of 1 percent,” he said. “I have figured that out to be at most $4.94 for every $1,000 a teacher has invested.”
The pension system is not changing its portfolio but is taking advantage of bargain-basement prices to buy some stocks, Beavers said.
Funded liabilities in the teachers retirement system are at about 52 percent, while an 85 percent ratio is considered to be a sound pension system. Two years ago, the system was at or near the bottom of 150 similar systems throughout the country, officials said.
Last year, the Legislature moved to shore up the unfunded liabilities in the teacher fund, embarking on a plan to contribute $60 million annually to the system in the next 20 years.
That will add about $1 billion to the pension account.
State Treasurer Scott Meacham said he is working with other elected officials to develop ideas to allow pension and endowment funds to have more insulation from stock market fluctuations and to provide more liquidity to sell bonds in what has become a depressed institutional bond market.