- Executive director would help run $67 billion portfolio
- State could save billions over time
- Bill comes after failed bid to create a public corporation
The Investment Modernization Act, which has been introduced into the current session for state lawmakers, would allow the system to add an executive director to help run its investments with a staff of 20 to 25, including beefed-up risk management.
The effort comes after an attempt to build a public corporation ran into opposition from trade unions last year.
The Oregon Investment Council said the new measure would modernize and restructure its investment efforts and save billions of dollars over time.
”The Investment Division’s 1970s-era structure means that Oregon is paying top dollar to outsource much of its daily asset management activities,” the state said.
Oregon currently trails other pension funds in its peer group in risk management oversight capacity, according to a 2012 study by Funston Advisory Services.
Keith Larson, vice president of Intel Capital and a member of the Oregon Investment Councils said Oregon’s investment program “has not kept pace,” according to a prepared statement.
The proposed legislation, House Bill 4144, would set up the Oregon Investment Department as an independent agency, overseen by the Investment Council.
The amortized savings of this approach could total $2.7 billion over 20 years.
The Oregon pension fund incurs annual management fees of about 78 cents for every $100 of fund assets, compared to 68 cents for Washington State and 38 cents for the peer fund in Wisconsin.
Oregon Chief Investment Officer John Skjervem said the proposal to revamp how funds are overseen ”will fortify and extend” the state’s position as an “innovative, top-performing institutional investor.”
The pension fund booked a collective return of 15.6 percent in 2013, according to State Street Bank.