July 2016 Update

The most recent Police Pension Board meeting was held on July 20th. This meeting closed out the fiscal year.  The board certified the total fund return at -0.61% for the fiscal year ending June 30th.

Our fund remains very strong in spite of the recent market volatility seen over the last several months. As many of you are aware, we have a 7.5% return benchmark for our average annual rate of return and have continued to exceed this benchmark over the long term. This is the same percentage guaranteed to you in your Plan B and DOP payouts. In looking at the past 25 years, the fund has averaged an 8.23% overall return which is ahead of the established benchmark. 

Shorter term results, like our most recent fiscal year, have seen variable return rates and volatility which are continually evaluated and any sector allocation changes are made by the board if required. The past 12 months did result in a slight decrease in the overall value of the fund, but again compared to other funds both within and out of the state; the system remains strong. It was not a good market year for many and OPPRS was no exception.

Our current funding as of June 30th, 2016 was $2.195 Billion. Independent Auditors regularly evaluate the system annually.  These audits determine if the 7.5% benchmark remains viable. The audits also provides the system with an annual funding ratio. Last year, the fund was determined to be at the 98% funded ratio.

The Auditors have historically recommended maintaining the current 7.5% benchmark. In addition, the board performs due diligence reviews of the system and as such during the fiscal year just ending, the board requested an additional independent auditing firm review the Independent Auditor’s report to validate their results. No issues were found by the additional independent auditor. I will provide the audit results in a future message.

I have mentioned in previous e-mails that the board continues to monitor for securities and banking fraud and pursue litigation when feasible. We have been very successful in recovering the fund monies when fraud was involved.

There were no significant legislative issues encountered over the previous fiscal year. The system did obtain passage of its required annual IRS technical clean-up bill.

The new Chairman of the Board for fiscal year 2017 will be W.B. Smith, who is retired from OCPD, and Jim Keesee of Norman PD who holds the District 4 Office will be the new Vice Chairman of the Board for the fiscal year.

All of the normal monthly reports can be found on pension web site.

I’m proud to serve the OCPD members of the Police Pension System. Please contact me if you have any questions.

Jeff Pierce
State Trustee District 6
Past Chairman of the Board
Oklahoma Police Pension & Retirement Syste