HB 4144 will restructure Oregon investment program and slash fees paid to Wall Street firms.
An Oregon legislative committee today approved a proposal by State Treasurer Ted Wheeler and the Oregon Investment Council to restructure the state investment program and save an estimated $2.8 billion in fees during the next two decades.
The Investment Modernization Act – which was introduced as House Bill 4144 by a bipartisan coalition of legislators and endorsed by business, local government and organized labor associations — now moves to the Joint Ways and Means Committee.
“Oregonians want us to be innovative and efficient, and this bipartisan proposal will better protect Oregon trust funds like the Common School Fund, save billions in fees, and create jobs in Oregon instead of on Wall Street,” said State Treasurer Ted Wheeler, a member of the Oregon Investment Council.
The bill was requested by the Oregon Investment Council following studies of best practices in the investment industry.
The House Rules Committee held a public hearing before advancing the legislation by a unanimous vote. Speaking on the bill’s behalf were Treasurer Wheeler; Richard B. Solomon, a Portland accountant and the chair of the Oregon Investment Council; and representatives of endorsers including the Service Employees International Union (SEIU), Association of Oregon Counties, and top business associations. Nobody testified in opposition.
“Oregon has been ahead of the curve when it comes to our public investment performance, and we need to innovate to stay ahead of the curve,” Solomon said.
The proposal will yield changes to the staffing structure of the state investment office, will create a new independent agency, and would result in less need for expensive Wall Street firms to help guide the state’s $87 billion public portfolio. The savings to the pension system will be achieved by cutting investments fees— not by amending benefits for workers or retirees.
Treasury estimated the impact of the savings at $2.8 billion over the course of 20 years because that is the horizon used to amortize unfunded actuarial liabilities in PERS.
As of Dec. 31, the pension trust fund had grown to $67.1 billion and is invested globally in an array of public and alternative investments.
You can learn more about the Investment Modernization Act on the Treasury website, Click Here.
The Oregon State Treasury protects public assets and saves Oregonians money through its investment, banking, and debt management functions. State investment policies are overseen by the Oregon Investment Council.
The State Treasury also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices. You can track Treasury-related news on Twitter at @OregonTreasury.
