April 2015 Update

The Police Pension Board meeting was on April 15, 2015. As of 03-31-15 our pension fund is at $2.24 Billion. The one year return is 5.89%, 3 year is 9.63% and the 5 year is 8.84%. 

During fund manager presentations this month it was noted, Core Inflation continues to run below the target range of the federal government. Low oil prices continue to suppress inflation but is positive for the consumers and some businesses. With the end of expected quantitative easing from the FED, there is an expectation that the FED will begin small interest rate increases later in this calendar year.

Worldwide, the dollar is doing well at the moment. However, our investments are structured to help protect against the volatility should it occur in the equities market over the next several quarters.

Representative Randy McDaniel is chair of the Business, Labor and Retirement committee and is on the Appropriations and Budget committee. He had an editorial in the Oklahoman on 04-15-15 and stated that there have already been major reforms to the state pension systems and the legislators should keep the pension systems out of the budget talks. He concluded the article by stating “It is the duty of all of those elected to ensure the promises made to thousands of dedicated state and local employees are fulfilled, many of whom teach our children, protect our communities and risk their lives every day to serve the citizens of Oklahoma”.

Our annual IRS tax cleanup bill has been passed and signed by the Governor.

There are only two other pending pension bills at the time of this report:

HB1052 which expands the membership of the Oklahoma State Pension Commission (not our board) by two non-voting members.

HB2005 which deals with volunteer firemen and their pension.

As part of the statutory ‘Due Diligence’ requirements of the board, we continue to monitor investments for fraud. As such, our pension system will be moving forward with two new securities fraud class action law suits. The first, is due to allegedly issued materially false and misleading statements, and has cost our pension system loss is a little over $300,000. The second, is due to allegedly material errors in reporting that overstated earnings per share by between 75%-300% over a two year period, and  has cost our system a little over $200,000.

This month, five money managers made presentations in the afternoon. They outlined their historical and current positions in the market and expectations about future performance. The five presentations were from:

                Baring Focused International Equity Fund – International Equity Manager

                Encap Investments – Energy Private Equity Manager

                Wasatch Advisors – International Equity Manager

                Pacific Alternative Asset Management Corporation (PAAMCO) – Low-Volatility Hedge Fund of Funds Manager

                Agincourt Capital Management – Fixed Income Manager

Our pension system received the Certificate of Achievement for Excellence in Financial Reporting (CAFR) again this year from the Government Finance Officers Association (GFOA). This means our system goes beyond the minimum requirements of generally accepted accounting principles in the spirit of transparency and full disclosure.

There will be a special Meeting of the Pension Board on April 29th at 11 am. This is needed to approve a large number of new officer applications that failed to make it to the system before our meeting.

Frequently there are questions about the other state pension systems. I have included this clip from a report utilized by the Legislature. This shows all of the state’s pension systems funding status as of July 1, 2014 and compared to July 1, 2013.

The web site has all of the financial reports, agenda and minutes. If you have any questions, please contact me.

Jeff Pierce
State Trustee, 
District 6
Oklahoma Police Pension & Retirement System