Orange County Employees Retirement System, Santa Ana, Calif., directed staff to develop approaches to investing in natural resources funds and country funds. Both would be new asset classes for the $5.5 billion system, said Keith Bozarth, CEO.
OCERS also made fund investments of $30 million with American Realty Advisors and $55 million with CB Richard Ellis. The system's real estate allocation is 10% of total assets.
Separately, the Orange County Board of Supervisors hired actuary Bartel Associates to review the funded status of the system. The board and the system also could hired another actuary to verify actuarial assumptions made in a report issued last week, said Diane Thomas-Plunk, county spokeswoman. That report, conducted by current fund actuary Segal Co., showed the system had a $2.3 billion unfunded liability as of Dec. 31, 2004, almost double the $1.3 billion figure reported a year earlier.
Mr. Bozarth said that the system will wait to see what the county's actuary concludes before deciding on further work. "OCERS' interest in further analysis is related to helping everyone get comfortable about the significant change, not because we doubt the result we were presented," he said. Mr. Bozarth added that the increase reflects revisions made to a variety of assumptions that were revised based on a three-year experience analysis coupled with comparisons to similar systems. A statement on the system's website said OCERS' unfunded actuarial accrued liability has increased because of negative stock market returns in 2000, 2001 and 2003, benefit changes and "more cautious expectations on demographic factors" including retirement patterns, wage growth and employee behavior upon leaving employment.