THE Oklahoma Teachers Retirement System, once ranked among the nation's worst-funded systems, is now a source of some good news.
An Oklahoma Pension Commission report found the system's 16.3 percent return on investments in the first nine months of fiscal year 2013 placed it in the first percentile of all public funds in the United States. The fund's assets now stand at more than $11.6 billion.
However, the system still has an enormous unfunded liability. As of June 30, 2012, the OTRS's unfunded status totaled $8.4 billion; its funded ratio was just 54.8 percent, meaning the system could pay less than 55 cents on the dollar for all owed benefits.
The Legislature has enacted reforms that are gradually shoring up the system, along with healthy investment returns. In 2010, the OTRS was projected to never reach fully funded status. Now the system is on track to eliminate its unfunded liability in 22 years. The projection is based on achieving average 8 percent market growth on investments each year, so this year's returns could quicken the pace to full funding.
Before legislative reforms, the teachers' system had $10.4 billion in unfunded liabilities. Reform efforts cut that figure to $7.6 billion. Last year, investment losses increased that liability; this year's returns will have an offsetting effect. While investment returns may ebb and flow year to year, the teachers' retirement system is clearly headed in the right direction. A problem that once seemed insurmountable remains daunting, but appears far more manageable.
Another downtown skyscraper
Kevin Durant made big news this week, and we're not talking solely about his engagement. That's big — young NBA superstar decides to take the plunge — but it's eclipsed by KD's decision to live downtown. The broker for The Hill, a new development in Deep Deuce, says Durant has bought two adjoining townhomes and plans to convert them into one, 7,400-square-foot residence. So if he wanted to, Durant eventually could walk out of Chesapeake Energy Arena following a game, stop by his restaurant (scheduled to open late this year) along the Bricktown Canal, then mosey a few more blocks to his home. How cool is that? Bricktown developer Andy Burnett noted that Durant could live anywhere but chose downtown. “Imagine that taking place 15 years ago,” he said. Sorry, can't imagine it. KD's decision is one more sign of how the city has reinvented itself for the better in the past two decades.
Gov. Mary Fallin's concerns about the way the Department of Corrections conducts its business led her to ask for an audit of the agency. Fallin and agency Director Justin Jones sparred this year over revolving funds used by the DOC. Jones eventually decided to retire and will be out the door next month. Fallin wants the state auditor to undertake “an investigatory, operational and performance audit” of DOC, and to look into whether the agency has followed through on suggestions contained in a 2007 study conducted by an outside group. That study, approved by — and then mostly ignored by — legislators, cost the state $844,000. This one will come out of the DOC's budget, which will pinch an agency that received no increase in its appropriation this year. The audit may well turn up some problems that merit attention. The greater problem, though, is that so few policymakers are willing to attack DOC's overarching concerns — too many inmates, too few prison guards and crowded, aging facilities.
In 2012, state lawmakers provided a $2 million appropriation to a privately run youth livestock show. The appropriation wasn't publicized. It drew much criticism when it became public, particularly since it appears the money was obtained by cutting much-needed prison funds. It's since been learned that the appropriation was a bailout. The private livestock show had run up debts it couldn't pay. A lawsuit was filed to reclaim the state funds. Last week, the lawsuit was tossed. Apparently, no lawyers were notified of the hearing and no one showed up. Now the lawsuit will likely be refiled. The controversy, and legal expense for the state, will continue — all because legislators didn't want to publicly acknowledge how they were spending taxpayer dollars. They should have kept in mind the old admonishment: What's done in the dark will be brought to the light.