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About The Oregon state employee news. (Salem, Oregon) 1959-1969 | View Entire Issue (Dec. 1, 1969)
DECEMBER, 1969 Paae 5 OREGON STATE EMPLOYEE NEWS Interview With Treasurer Robert W. Straub: "I believe only money that can be left in stocks should be put into the stock market ... " ROBERT STRAUB (Editor's Note: Members of the Public Employees' Retirement System have less than three weeks left in which to make the decision of whether or not to participate in the new PERS "variable annuity" program. Those who want to begin investing a portion of their retirement ¿ontributions in the program on Jan. 1, 1970, must complete the "Employee's Notice of Election, Form. RS-A25-D" and submit it to the Public Employees' Retirement Board, 1400 S.W. F ifth, Portland, 9720I, no later than Dec. 31. If th e -fo rm is not received by that date, members must wait until Jan. 1, 1971, before they can enter the program. Forms are available from any state agency or from the PERS office. « In an effo rt to help state employees make up their minds about whether or not to participate, the NEWS conducted the following interview w ith State Treasurer Robert W. Straub about the program.) OSEA: Mr. Straub, we would like to begin this interview by asking you to briefly explain the variable annuity program. STRAUB: The variable annuity program is a plan authorized by the Legislature to allow public employees to have invested a portion of their retirement payments in common stocks. OSEA: If he elects to participate in the variable annuity program, w ill a member own specific shares of stock? STRAUB: No. He w ill own a portion of a portfolio of stocks held by the State Common Stock Growth Fund. OSEA: How w ill each member's share be determined? STRAUB: By valuing the total portfolio and determining what each member's portion is of the total. Valuation w ill be made Dec. 31 each year and these values w ill be on the books as of Jan. 1 of the next year. For employees quitting during the year, the value of his variable annuity interest w ill be determined at the last available m onthly evaluation established. OSEA: What is the function of the Oregon Investment Council? STRAUB: To set policy and oversee the investment o f the state funds, including the variable annuity fund. OSEA: Who are the members of the council? Could you tell us something about their qualifications? STRAUB: The members are: Park Stalnaker, representing th e R e tire m e n t B o a rd , an in vestm e n t counselor w it h a long OSEA: What is the objective o f the program? STRAUB: To increase the value o f the employees' retirement fund and to receive a higher monthly payout during their retirement. OSEA: The variable annuity program was authorized by the 1967 Legislature. Why has it taken so long to get under way? STRAUB: The law was passed in 1967, to become effective Jan. 1, 1968. However, in order fo r the state to begin a common stock program it was necessary to test the constitutionality of the 1967 Investment Law. The State Supreme Court said OK in the spring of 1969. The 1967 Investment Law required that the courts settle the question before the variable annuity program could start. OSEA: What portion o f his retirement contribution may a member o f the PERS elect to have invested in the variable annuity program? STRAUB; Either 25 per cent or 50 per cent o f his personal contribution. OSEA: If an employee does not elect to participate at this time, w ill he be given another opportunity at a later date? STRAUB: Yes, he may do so at any time to become effective Jan. 1 of each year. OSEA: How about past contributions? May an employee have a portion or all o f his present account balance invested in the variable program? STRAUB: An employee can have contributed up to 50 per cent of his past contributions by electing to have 10 percent transferred over per year fo r a period o f five years. background in investment activities, formerly president of Standard Insurance, and former chairman o f the Public Employees' Retirement System Board; Howell Appling, representing the public, appointed by the Governor, former Secretary o f State and prominent Portland businessman; Don Ellis, treasurer of Tektronix, representing the public and appointed by the Governor; and myself, as State Treasurer. A fifth member w ill represent the Public Employees Retirement System, but at present this position is vacant since the death of Max Manchester. OSEA: How long do council members serve? STRAUB: Four years. The terms are staggered to insure continuity in our programs, OSEA: Who appoints or elects the Investment Council? How about its chairman? STRAUB: Two members are appointed by the Public Employees' Retirement System, two are appointed by the Governor, and the State Treasurer is a member by statute. The chairman is chosen by the Investment Council members. OSEA. Does the Investment Council have the responsibility of investing the PERS funds in the stock market? STRAUB: No. The law requires that the investment in stocks shall be done by hiring an investment management firm . OSEA: Earlier this year the Investment Council selected three investment firms to handle the investment of stocks. Will you name them? _ STRAUB: Fayez Sarofim, Houston, Texas; Capital Guardian Trust Company, Los Angeles; and Transamerica Investment Company, Los Angeles. OSEA: If an employee elects to place part of his retirement contributions into the program, is he forever bound to that decision? STRAUB: If the employee elects to contribute 25 per cent, he may at a later time elect to increase this to 50 per cent. A t the tim e o f his retirement, he may elect to transfer his variable annuity account to a fixed annuity account. OSEA: Why were those three particular firms chosen? What was the criteria? STRAUB: Those three were chosen after screening some 65 applicants and the personal interviewing .o f ten by the Investment Council. The criteria was to choose firms that had been successful managing other people's money, that were large enough to have adequate experience and background and depth of management, and yet not be too large. OSEA: May he increase or decrease the percentage of his contribution at a later date? STRAUB: He may increase the percentage at a later date from 25 per cent to 50 per cent. He may not decrease it. OSEA: W hatkind of investment records do they have? STRAUB: Their record fo r the past five years has been growth of capital of approximately 15 per cent per year. (Continued on page 6)
