Sniffing around the bureaucrat pension pot

An alert reader sends along this story, about hijinx at the public school employees' pension fund in Pennsylvania. The FBI is looking into some monkey business there, including apparently cooked numbers and crazy investments in such things as Kurdish rebel crude oil and prison pay phones.

The decisions that brought the fund to this point — the investigation is still in its early stages — are by now commonplace in the world of public pensions. Lawmakers years ago overpromised what the Pennsylvania fund would provide its members, even as the performance of its plain-vanilla stock and bond investments fell far short of what was necessary to deliver on those commitments.

That pushed the $62 billion fund into the highly risky world of alternative investments, which can sometimes pay big bucks but also cost exorbitant fees and tie up money in ventures that retail investors wouldn’t touch. Despite putting an eye-popping 51 percent of assets into alternatives, the fund couldn’t deliver the high returns it sought.

My reader suspects that much the same could be said of the Oregon public employees' retirement system. I'm sure it would be interesting to leaf through what all the brilliant minds in Salem have gotten all those tax dollars into.