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PERF confusion

March 9, 2009
Your March 2 article "Indiana plotting pension merger" is confusing. I am not at all sure that a merger of these two plans is not a good idea, possibly just not under current investment management auspices.

The article states that the larger Public Employees Retirement Fund lost one-third of its value from peak, while the smaller Teachers Retirement Fund lost one-quarter of its value, which is more in line with other public pension plans. And this is without knowing the value of the very expensive alternative investments carried by PERF.

The Legislative Services Agency says pooling of assets will increase annual returns! Must be some sort of magic — how about increased losses? To top this off, [PERF Chief Investment Officer Shawn] Wischmeier admits that he does not know the value of his alternative investments.

They have no place in a relatively small public pension plan. And PERF wants to get to 30-percent invested! From bonds to this? All of this consolidation to save about 0.05 percent of invested assets in one-time fees and 0.007 percent in annual fees.

I like saving, but go figure. And Bill Styring complaining about the plan's investment fees of 0.5 percent of invested assets is interesting, especially when PERF is paying a fee for those alternatives. Styring brags that he will work for $1 and manage to lose less money. I will work for 50 cents and save even more by investing the $26 billion in CDs or bank savings accounts!

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Larry Davis
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