State Retirement System Losses Prompt Merger Call

"The Review Team recommends that management of Arkansas' five Retirement Systems be consolidated under one agency." (Arkansas Policy Foundation, 1998)

Investment losses by the Arkansas State Police Retirement System have led a state Senator to suggest merging the system, a proposal first made by the Murphy Commission, a Policy Foundation project in 1998.

The State Police Retirement System has lost 47 percent since mid-2007, according to published reports1. State Sen. Steve Faris, D-Malvern, proposes merging ASPRS with the Public Employees Retirement System, a move he says would protect the benefits of troopers and their families. Faris' measure (SB 138) states:

"The merger shall ensure a strong funded status while ensuring that benefits provided to the annuitants and beneficiaries of the retirement systems maintain sufficient liquidity to provide benefits in accordance with Arkansas law."

The Policy Foundation’s 1998 report, "The Arkansas Public Employees Retirement System," estimated "a 20-to-25 percent savings in administrative expenses" by merging the state’s five retirement systems. The report estimated savings of $2.8 million annually, or $28 million in a 10-year period. The Arkansas Teachers Retirement System, the Arkansas Judicial Retirement System, and the Arkansas State Highway Employees Retirement System are also discussed in the 1998 Foundation report, posted online (Archive) at:

The Foundation recommendations, made near the peak of a bull market, were designed to protect retirees—and Arkansas taxpayers—from a multi-year bear market.

--Greg Kaza

1 ASPRS investments have declined from $250.1 million to an estimated $132 million. "State police system’s investments lose value,", Aug. 15, 2008; "Retirement systems down $2 billion,", Jan. 16, 2009; "Police fear merger 'mess,' trustee says," Arkansas Democrat-Gazette, March 17, 2009. Michael R. Wickline reported the stories.

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