State legislators: Oregon treasury’s investment choices create risk to us all


The Oregon Public Employee Retirement System (PERS) pension fund has been in the national spotlight recently because of risks from private investments hidden from the public. What risks? Risk to public employees’ retirement, risk to taxpayers who have to pick up the shortfall, risk to workers as private equity asset managers rake in huge profits at Oregonians’ expense, risk to all Oregonians as private equity undermines our communities, and risk to the climate as private equity firms are uniquely exposed to fossil fuel companies.

A recent article in the business section of The New York Times, “The Risks Hidden in Public Pension Funds,” focuses on the Oregon treasury’s unusually large private investments in PERS. The treasury has long hailed its private equity investments for producing high rates of return, overlooking warning signs that the managers report earnings that turn out to be overstated. The Times reported, “they aren’t taking account of the true risks embedded in private equity. Oregon’s pension fund is over 40% more volatile than its own reported statistics show.”

In addition to documenting overstatement of private equity returns, the Times article notes risks associated with private equity, including takeovers that load up target companies with debt while stripping assets and turning public services like health care into short-term private profit centers at the expense of workers and patients. Oregon treasury’s investment in a Multnomah County ambulance company, owned by the private equity firm KKR and now loaded with debt, is a concrete example of the risks of private investments to firefighters, police and the public.

The holdings in these private investments are secret, denying the public the ability to evaluate them. The Oregon State Treasury’s risky investments in private equity, often in climate-wrecking industries, is one reason that the Divest Oregon coalition has supported transparency and oversight legislation in Salem the past two sessions. These latest revelations suggest it is past time for this legislation; it is on legislators’ agendas for 2024.

Divest Oregon’s 2022 report, “Oregon Treasury’s Private Investment Transparency Problem,” documents that more than 50% of PERS is in private investments, with various labels (“private equity,” “alternatives,” “opportunity,” even real estate).

These private funds are heavily invested in coal, oil and gas. The treasury increased its investments in fossil fuels in private investments from 2021 to 2022 (the most recent data released by the state) and continues to invest billions in the fossil fuel industry in 2023, for example in the private investment firm GNP. While Divest Oregon applauds Treasurer Tobias Read in his work to create a “decarbonization plan” for PERS, the treasurer must respond to calls to stop new private investments that fund the climate crisis.

The treasury is a public agency entrusted with public employees’ retirement funds. Opaque private investments with all of their uncertainties and risks are inconsistent with the long-term horizon required by pension funds. Private funds block beneficiaries from knowing how their deferred wages are being managed and what they are funding.

All of us have a right to know if the state treasury is making prudent investment choices that benefit our communities.


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