State teacher retirement system gets new furniture, remodeling
By Patrick B. McGuigan
The Oklahoma Teacher Retirement System, among the most poorly-funded government retirement systems in the United States, has spent almost $105,000 on office renovations in recent months, CapitolBeatOK has learned.
A request for proposals circulated late last year from the Department of Central Services. The DCS Project Number is 10163. It was described as “Remodel and alter 5th floor for the Teacher Retirement System, Oliver Hodge Bldg., Okc, Ok.”
A bid pre-meeting was held December 3, 2009. A total of eight bids were received. The awarded vendor was J.W. Walker & Company of Oklahoma City, in the amount of $104,789. Notice to proceed was dated January 12, 2010. Project work began, according to witnesses, several weeks ago.
In an unsupervised visit to the Hodge Building a few days ago, this reporter saw a desk in good condition being transported from the basement area of the main building and into the area where the construction trash bin is located.
The walk-around visit to the agency, located just north of the state Capitol in Oklahoma City, uncovered visible evidence of the changes that have been under way at the agency.
In the basement of the Hodge Building, accessible through a driveway and ramp that drops from the ground level north of the building into the basement, is a covered area where trash is collected and deliveries are made. The area includes a loading dock and an inaccessible area with warning signs about electrical and other equipment.
In the accessible dock area (the north/northeast underside of the building) was a large trash bin of the sort that gets filled up at active construction or reconstruction sites, to be hauled away (and replaced) every few days.
In the huge trash receptacle were pieces of desks, drawers and other materials. Many boxes could be seen. Undamaged white plastic strips were visible in the trash bin. These are coverings intended to be attractive visually while protecting walls from buffers and cleaning machines.
Eye witnesses have told CapitolBeatOK that the bin has been emptied or replaced at least seven times, and perhaps as many as ten times, in the last few weeks. These eyewitnesses have said the bin has contained what appeared to be desks and other furniture in good condition.
A trip to the fifth floor of the Hodge Building revealed a nicely appointed reception area. Behind the reception desk was a light wood-looking material that appeared brand new.
Chatting with an employee, CapitolBeatOK’s editor commented “That is beautiful.” The employee replied, “Yes, and it’s brand new.” CapitolBeatOK was told, “It’s very nice. They were going to these nice big gold letters up saying our name; we’re the Oklahoma Teacher Retirement System.” The employee continued, “They found out those letters won’t attach to this so they’re going to have to do something different.”
In the office areas each side of the desk could be seen attractive desks and dividers or partitions of a rich wood color that appeared, from a distance, to be darker than the wall behind the reception area.
TRS came to the Hodge building a few years ago and, at that time, secured nicely apportioned furniture and other office materials.
Earlier this year, the Pew Center on the States designated Oklahoma as resting among the nation’s most poorly funded public (government) retirement systems.
Soon after the Pew report circulated, high-ranking state officials took note of the concerns. Tom Spencer, executive director of the Oklahoma Public Employees Retirement System (OPERS, a system separate from the OTRS) described the Pew Report as “informative” and said, “There are valid reasons for concern raised by the report.” Still, he argued that comparatively sound systems were being lumped with others that are not sound. He contended in an “OPERS Online” statement, that the Pew study “is a very good and accurate report, but can be slightly misleading.”
Spencer said “the severely underfunded Oklahoma Teachers Retirement System (2nd or 3rd worst funded in the country) drags all of the Oklahoma plans down in the state-by-state statistics. While the ‘funded ratio’ for OPERS (66.8% at the end of FY 2009) has been adversely impacted by the recent economic downturn, we believe that the funding issues we face are manageable.”
The Institute for Truth in Accounting, based in Illinois, had0 previously reported that “As of June 30, 2009 the State’s Teachers’ Retirement System (TRS) funding ratio (assets set aside compared to pension liability) is less than 50%. But the news gets worse, because that ratio is based on assets being valued using the average market value over the last five years. If the ratio is calculated using the current market value, then the ratio drops to only 38%.”
IFTA, run by economist Sheila Weinberg, has estimated that Oklahoma’s unfunded debt amounts to $14,600 per family.
Treasurer Scott Meacham, at his March revenue briefing, told CapitolBeatOK, “Meacham responded, “By far the worst of all our systems in terms of unfunded liability is the teacher retirement system, and in fact it is one of the worst in the entire country. It absolutely does pull down our overall numbers.”
In a 2007 letter, Treasurer Meacham said, “The biggest problem exists with the biggest pension fund – the Teachers’ Retirement System – where actuaries indicated that nearly three times more money than is currently received is needed to properly fund the system.”
In April, the Manhattan Institute and the Foundation for Educational Choice released an even more critical assessment of teacher retirement systems around the country.
In Oklahoma’s case, the two groups contended the system is funded at only 34-38%.
At his April revenue briefing with Capitol reporters and in a follow-up interview with CapitolBeatOK, Treasurer Meacham was carefully critical of some of the assumptions in the Manhattan/Friedman study.
The Legislature created the Oklahoma Teacher Retirement system in 1943. Public school employees working half-time or more are eligible to participate in the system, as are some private association executives, including leaders of the Oklahoma Education Association.
While teachers and administrators must join, participation if voluntary for public school support staff. According to the TRS website employees of some 600 school districts,
CareerTech schools, public colleges and universities are members of the
TRS. The system had 138,235 members as of June 30, 20005 (84,286 active
contributing, 13,080 inactive and 40,879 retired members).
The website includes this statement: “The mission of TRS is to provide retirement benefits to Oklahoma’s educators. The Board of Trustees and TRS staff oversee its administration to ensure adequate funds are maintained to meet the financial obligations of the entire membership. In directing the investments of TRS funds, the Board seeks to maximize gains, minimize losses and protect the Trust. The staff stands ready to assist TRS members in any matter pertaining to accruing benefits, and planning for and enjoying a well-earned retirement.”