Oregon Takes Page from the Canadian Public Pension Model

17. Jan, 2013

Oregon State Treasurer Ted Wheeler

Oregon State Treasurer Ted Wheeler introduced Senate Bill 120 (Oregon) which would turn the US$ 74 billion Oregon Investment Council (OIC) into a public corporation. The public corporation would be called the Oregon Investment Corporation. The state legislation will also exempt the proposed investment corporation from certain laws that regulate government entities. By moving the budgetary authority from the state treasury to the proposed Oregon Investment Corporation, it will enable the entity flexibility in managing human resources.

The government of Alberta did a similar thing by creating Alberta Investment Management Corporation (AIMCo), so did British Columbia, British Columbia Investment Management Corporation (bcIMC). AIMCo and other Canadian public pension have developed large in-house teams in various asset classes such as real estate, private equity, and external equity management, saving money on management fees.

It would enable the proposed entity more flexibility, the power to enter strategic partnerships, change pay structures to attract more in-house capabilities, and save money on external manager fees.

Other interesting notes in the legislation include the governor of Oregon appointing four voting members to the board which can be removed by the governor with or without cause. The members must be qualified by training and experience in the areas of finance or investments.

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