The Latest OPPRS Board meeting took place on Wednesday Aug. 17th. With the most recent rise in market prices our fund balance, as of July 31st, had risen to $2.244 billion of total fund assets. In the month of July the fund enjoyed a $50 million asset increase. However, with the market volatility over the last few recent years, the net portfolio return has consistently remained below the 7.5% target for the system.
The most recent current historical returns are; FYTD = 2.25%; 3 months = 3.33%; Calendar YTD = 4.67%. The current 12 month return = 0.86%; and the 5 year = 6.52%. As you can see, market volatility has a direct impact on the system performance. During the past year, the systems US investments were mainly positive while the international and emerging markets under performed. Our real estate assets performed very well and hedged against the commodity market investments made by the system which also under performed. The detailed and categorized monthly financial report can be found on the OPPRS web site for review.
We are currently conducting the annual independent audit of the OPPRS system and should have an actuary report for review at next month’s meeting. It is speculated a new funding ratio may be announced after the audit and actuary report are completed.
We now have police departments of two new cities participating in the OPPRS system. They are Chouteau and Wagoner. This brings the total number of Oklahoma cities participating in the pension system to 139 cities.
Below is a link to a recent article in the Dallas Morning News regarding the solvency (or lack thereof) of the Dallas Police and Fire Pension. http://www.dallasnews.com/news/local-news/20160811-can-dallas-police-and-fire-pension-fund-be-saved-officials-propose-changes-to-head-off-insolvency.ece.
Keep in mind this system is ran by the city of Dallas and shares few characteristics with OPPRS. This information is purely provided as an example of how ignoring issues in public pension system and ‘kicking known problems down the road’ for someone else to deal with, can get a pension system in trouble.
As always, the OPPRS system web site has the monthly investment returns, minutes, agendas, RFP’s and other system information for anyone that is interested in reviewing them.
Please feel free to contact me if you have any questions.