OER_4-30-13 1 |
Previous | 1 of 8 | Next |
|
small (250x250 max)
medium (500x500 max)
Large
Extra Large
large ( > 500x500)
Full Resolution
All (PDF)
|
This page
All
|
State Capitol Building, Room 217 • Oklahoma City, OK 73105 • (405) 521-3191 • www.treasurer.ok.gov A publication of the Office of the State Treasurer • Treasurer Ken Miller, Ph.D. Economic Report TM Volume 3, Issue 4 • April 30, 2013 Oklahoma News and analysis of Oklahoma’s economy Inside SEE PENSION SAVINGS PAGE 3 • Treasurer’s commentary: What a difference a year makes • Q & A with House Budget Chair Scott Martin • YTD General Revenue ahead of estimate • Gross revenue up in March • Unemployment unchanged Contributor Regina Birchum, Deputy Treasurer for Policy/Chief of Staff Editor Tim Allen, Deputy Treasurer for Communications/Program Administration When streamlining the management of the state’s seven pension systems was originally proposed in February by Governor Mary Fallin and Treasurer Ken Miller, annual savings of between $10 million and $15 million were estimated, based on savings achieved in past consolidation efforts. Because proponents and opponents alike wanted a better indicator of potential saving, a historical analysis was requested from New England Pension Consultants (NEPC) in March. Their cost/benefit analysis estimates that if Oklahoma’s pension plans were packaged into a single investment pool, economies of scale would result in lower investment fees. Depending on the investment management approach selected – more active management or more passive management – the savings in investment and consulting fees could result in a savings of between $12 million to $49 million annually. Additionally, it has been estimated that $3.5 million in administrative savings could be achieved annually from shared personnel, elimination of duplicative office space, operating expenses and other overhead. The state’s five largest plans alone spend more than $15 million annually on these administrative costs. “Critics contend the savings are more likely to be near the lower end of the estimated range and that $15 million in savings is not worth the trouble,” said Proposals offer potential savings Miller. “I disagree. But even if they are right, every dollar saved is a dollar that will go back into paying benefits.” Miller referenced a recent news article about $850,000 in Oklahoma City police radios sitting in storage. “As the state auditor rightfully pointed out, it was a ‘significant waste of taxpayer dollars.’ Certainly, most taxpayers would think that saving $15 million a year is worth the trouble.” NEPC also looked back over the past five and 10 years worth of investment returns for each of the plans to show that significant additional earnings could have been gained had either one of the two best-performing plans Potential Investment Fee Savings Source: NEPC, LLC Current Fee Structure OPERS Scenario Total Pension Funds $20,353.21 $20,353.21 $20,353.21 Average Fees 0.35% 0.31% 0.11% Investment Mgmt Fees $71.40 $63.09 $22.39 Custody -$9.55 -$12.46 -$6.15 Net Mgmt Fees $61.85 $50.63 $16.23 Investment Consultant $3.71 $2.75 $0.45 Total Fees in 2011 $65.56 $53.38 $16.68 Total Savings $12.17 $48.87 (Dollar amounts in millions) TRS Scenario
Object Description
Okla State Agency |
Treasurer, Oklahoma State |
Okla Agency Code |
'740' |
Title | Oklahoma economic report, 04/30/2013, v.3 no.4 |
Authors |
Oklahoma. State Treasurer. |
Publication Date | 2013-04-30 |
Publication type | Newsletter |
Purpose | Proposals offer potential savings; Treasurer's Commentary by Ken Miller, What a difference a year makes; Q & A with House Appropriations and Budget Chair Scott Martin; Meet Rep. Scott Martin; General Revenue allocations slightly exceed estimate; Oklahoma gross revenue up in March |
For all issues click |
T1400.6 E19r |
Digital Format | PDF, Adobe Reader required |
ODL electronic copy | Downloaded from agency website: http://www.ok.gov/treasurer/documents/OER_4-30-13.pdf |
Rights and Permissions | This Oklahoma state government publication is provided for educational purposes under U.S. copyright law. Other usage requires permission of copyright holders. |
Date created | 2013-05-16 |
Date modified | 2013-05-16 |
OCLC number | 890223746 |
Description
Title | OER_4-30-13 1 |
Full text | State Capitol Building, Room 217 • Oklahoma City, OK 73105 • (405) 521-3191 • www.treasurer.ok.gov A publication of the Office of the State Treasurer • Treasurer Ken Miller, Ph.D. Economic Report TM Volume 3, Issue 4 • April 30, 2013 Oklahoma News and analysis of Oklahoma’s economy Inside SEE PENSION SAVINGS PAGE 3 • Treasurer’s commentary: What a difference a year makes • Q & A with House Budget Chair Scott Martin • YTD General Revenue ahead of estimate • Gross revenue up in March • Unemployment unchanged Contributor Regina Birchum, Deputy Treasurer for Policy/Chief of Staff Editor Tim Allen, Deputy Treasurer for Communications/Program Administration When streamlining the management of the state’s seven pension systems was originally proposed in February by Governor Mary Fallin and Treasurer Ken Miller, annual savings of between $10 million and $15 million were estimated, based on savings achieved in past consolidation efforts. Because proponents and opponents alike wanted a better indicator of potential saving, a historical analysis was requested from New England Pension Consultants (NEPC) in March. Their cost/benefit analysis estimates that if Oklahoma’s pension plans were packaged into a single investment pool, economies of scale would result in lower investment fees. Depending on the investment management approach selected – more active management or more passive management – the savings in investment and consulting fees could result in a savings of between $12 million to $49 million annually. Additionally, it has been estimated that $3.5 million in administrative savings could be achieved annually from shared personnel, elimination of duplicative office space, operating expenses and other overhead. The state’s five largest plans alone spend more than $15 million annually on these administrative costs. “Critics contend the savings are more likely to be near the lower end of the estimated range and that $15 million in savings is not worth the trouble,” said Proposals offer potential savings Miller. “I disagree. But even if they are right, every dollar saved is a dollar that will go back into paying benefits.” Miller referenced a recent news article about $850,000 in Oklahoma City police radios sitting in storage. “As the state auditor rightfully pointed out, it was a ‘significant waste of taxpayer dollars.’ Certainly, most taxpayers would think that saving $15 million a year is worth the trouble.” NEPC also looked back over the past five and 10 years worth of investment returns for each of the plans to show that significant additional earnings could have been gained had either one of the two best-performing plans Potential Investment Fee Savings Source: NEPC, LLC Current Fee Structure OPERS Scenario Total Pension Funds $20,353.21 $20,353.21 $20,353.21 Average Fees 0.35% 0.31% 0.11% Investment Mgmt Fees $71.40 $63.09 $22.39 Custody -$9.55 -$12.46 -$6.15 Net Mgmt Fees $61.85 $50.63 $16.23 Investment Consultant $3.71 $2.75 $0.45 Total Fees in 2011 $65.56 $53.38 $16.68 Total Savings $12.17 $48.87 (Dollar amounts in millions) TRS Scenario |
Date created | 2013-05-16 |
Date modified | 2013-05-16 |