Fund to study retirement center

Teacher pension system to look into leasing or selling it

The trustees for the Arkansas Teacher Retirement System on Monday directed their executive director to study the possibility of either leasing out the Woodland Heights retirement center in Little Rock to a contractor or selling it.

The action came after Executive Director George Hopkins told the trustees that 73 percent of the 146-unit retirement center just south of Interstate 630 is occupied, but its occupancy rate is hindered by the lack of an adjoining assisted-living facility.

The existing independent-living center could do a better job of taking care of its residents if it offered an assisted-living option for them, Hopkins told the trustees.

The system took ownership of the retirement center and two nursing homes in Little Rock and North Little Rock in July 2001 after Riley Co. defaulted on a $14 million loan from the system. It subsequently sold the nursing homes and spent more than $20 million several years ago to renovate and add on to what was a retirement center with more than 60 units.

The teacher system is the state government’s largest retirement system, with investments valued at more than $14 billion, and serves more than 100,000 working and retired members.

The system’s trustees also approved investing up to $85 million in real estate and private-equity funds, decided to credit the system’s deferred retirement participants’ accounts with 6 percent interest in fiscal 2015, and granted staff members authority to negotiate the purchase of two lots northwest of the system’s current headquarters and parking area in Little Rock.

The investments include up to $30 million in the Chicago-based LaSalle Asia Opportunity Fund IV that will put money into real estate, primarily in Australia, China and Japan; up to $30 million in the Washington, D.C.-based Carlyle Realty Partners Fund VII, which will invest in the United States; and up to $25 million in the San Francisco-based private equity fund Thoma Bravo XI, which will invest in software companies in the United States.

The trustees learned that the system’s Chicago-based investment consultant Hewitt Ennis Knupp has narrowed the list of candidates to be the manager of a roughly $50 million Arkansas Opportunity Fund from 15 firms to Stephens Inc. of Little Rock, The Circumference Group of Little Rock, and Delta Trust of Little Rock.

The fund would allow the system to make investments not available through its cur- Today’s radar speed checks Little Rock and North Little Rock police, and the Pulaski County sheriff’s office will use radar to detect speeding at these locations. Police and sheriff’s deputies may conduct radar checks in other locations as well.

rent investment managers, Hopkins said.

The trustees also voted to credit the accounts of the deferred retirement participants, starting July 1.

The trustees reviewed the system’s investment return for the year that ended March 31 - which was 14.5 percent based on a preliminary report from Hewitt Ennis Knupp - to determine the interest rate to be paid on the deferred retirement accounts in the coming fiscal year under the board’s rules, Hopkins said.

Historically, the board has granted 6 percent interest on the accounts when the system’s investment return exceeded 8 percent, he said.

They directed Hopkins to draft possible legislation for discussion in advance of the 2015 legislative session to deal with the rising number of school districts that are contracting out work such as transportation, custodial and food services, classroom aides and assistants and substitute teachers, after he said the system covered less employee payroll in fiscal 2013 than in the previous fiscal year.

A system staff report suggested requiring a surcharge of between 7 percent and 10 percent “on all contracts that outsource school functions typically provided by an employee instead of a contractor.”

The system charges school districts the equivalent of 14 percent of employee payroll, which is about $400 million a year.

Arkansas, Pages 11 on 04/15/2014

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