Board members of the Oklahoma Police Pension and Retirement System expressed outrage Wednesday at language in a draft report that described their investments as "hyper-aggressive" and "the equivalent to betting a trifecta on a horse race with pension funds." The draft report is "extremely irresponsible," said David Been, the governor's appointee to the police pension board. "We've been the most responsible system in the state." Board member W.B. Smith agreed. "We're not out here just trying to ... throw all the money on the first horse and hope it's going to win," he said. Board members were responding to a March 5 article in The Oklahoman that quoted from a draft report by the Oklahoma Pension Oversight Commission. The draft report criticized the board for placing 5 percent of its investments in private equities and 20 percent in hedge funds, contending those investments were high risk. It compared the private equity investments to betting on a trifecta. "My phone rang off the wall," Smith said. He said pensioners were upset that the report criticized the board's investment policies, while making no mention of how the insurance premium tax was taken away as a source of funding for the police system. "They're robbing the system again. They took the money away and they don't say anything about that," he said. Board members voted to express their displeasure by sending a letter to the governor, legislative leaders, oversight committee members and members of legislative retirement committees. The letter defends the board's investment policies as prudent, successful and in line with those of other funds of similar size on a national basis. "We have been in the alternative investment arena for more than a decade, so we are not chasing a return to try to .... earn our way out of the unfunded liability status," said Bob Wallace, executive director of the police pension fund. Board members said they agreed with the part of the oversight commission's draft report that said the state's pension systems, as a whole, are under-funded because of "benefit increases voted on by the Legislature over many years without corresponding funds contributed to the systems to pay for those benefits." They also agreed more money needs to be put into the systems. Oklahoma's seven state pension systems have more than $10 billion in unfunded liabilities. The Oklahoma Teachers' Retirement System is in the worst shape, with about $7.1 billion in unfunded liabilities. The police system has about $388 million in unfunded liabilities, the draft report said.
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