Treasurer will ask to dump Wall Street consultants

SALEM — State Treasurer Ted Wheeler plans to ask the Oregon Legislature for authority to hire more investment managers to replace some of the Wall Street consultants now handling portions of the state pension fund.

The treasurer's office says state workers could do the same work for less money.

An annual analysis of the world's largest pension systems found Oregon spends more than average on investment management and could save about $12 million a year. The report by CEM Benchmarking of Toronto found Oregon spends 0.69 percent of the $60 billion pension fund on management each year, compared with an average rate of 0.59 percent.

Wheeler will ask for hiring authority during the legislative session that begins in February, Treasury spokesman James Sinks told the Salem Statesman Journal.

The bottom line for the treasurer, Sinks said, is, “Why would you pay someone to do something when you can do it yourself?”

The same report also found that Oregon gets better investment returns than most of its peers. That's partly because Oregon has emphasized real estate and private equity funds, which weathered the Great Recession better than the bonds and publicly traded stocks that comprise most pension funds.

That focus probably wouldn't change much with more in-house management, although some emphasis would probably shift from private to public stocks, Sinks said.

Public pension costs have been in the spotlight lately as local governments and the state contend with a sharp rise in required taxpayer contributions due to substantial losses during the recession.

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Information from: Statesman Journal, http://www.statesmanjournal.com