OIC’s Dream of Independence Fades

Posted on 05/30/2013

A few mega American public pensions are trying to augment internal operations to save on investment management fees, increase efficiency and manage complex investments. Many of the Canadian public pensions are managed by public investment corporation entities like Alberta Investment Management Corporation (AIMCo) and OMERS. This concept has piqued the interest of academics, policymakers and board trustees.

Oregon’s Investment Modernization and Cost Reduction Act is a state bill that would essentially enable the Oregon Investment Council direct authority over the investment division’s budget, staffing and compensation. By separating the investment division from the Oregon State Treasury, it would give professional staff enhanced autonomy on investment execution. In addition, the entity would become a public investment corporation. Currently, the budget which includes salaries is subject to approval by Oregon’s legislature while expenses are paid by the pension fund.

The Service Employees International Union Local 503 opposed the legislation citing transparency issues. The bill will not receive a floor vote in the upcoming state legislative session.

Appointed in 2007, Keith Larson, the chairman of the Oregon Investment Council, expressed frustration to the point of the threat of resigning if the Oregon state legislature doesn’t pass the law. Keith Larson is an Intel Corporation executive.

Oregon’s Investment Modernization and Cost Reduction Act was introduced by Oregon State Treasurer Ted Wheeler. The bill had the blessing of the Oregon Investment Council.

Keywords: Ontario Municipal Employees Retirement System, Oregon Public Employees Retirement System.

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