Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Retirement Investments topic
No spam. Unsubscribe anytime.
Oklahoma County trustees approve purchase of two judgments after debate over concentration and self-dealing
Summary
The Oklahoma County retirement board approved buying two judgments (one for $350,000 and one for $75,000) for the defined-benefit plan after the treasurer and the district attorney argued the purchases are lawful and can lower settlement costs; one trustee warned the purchases risked overconcentration and potential "self dealing."
At its meeting the Oklahoma County retirement board approved buying two judgments offered for purchase — described in the agenda as one for $350,000 and one for $75,000 — after debate over investment concentration and potential conflicts of interest.
The treasurer moved to approve items 5 and 6, defending the practice as a way to gain better settlement terms and saying the retirement system monitors liquidity: "I would never put most of all, our retirees ... we are not," the treasurer said, arguing staff has the liquidity procedures in place. The treasurer described judgment purchases as a negotiation tool that can reduce overall settlement costs by allowing the county to offer cash in exchange for a lower lump-sum obligation.
A trustee who identified himself as a CPA raised repeated concerns about concentration of the retirement plan in judgments and the possibility of "self dealing," saying the board needs a clear policy threshold for when purchases should stop. That trustee noted current holdings in judgments are "roughly 25%" of total funds and said this is the fourth or fifth round of purchases in about 12 months.
The district attorney urged the board to consider both legal and practical factors, telling trustees the DA's office had reviewed the program and supported it. "It is not double dealing," the District Attorney said, and added the interest on judgments is capped by statute (cited in the meeting as 10%), making the purchases predictable; the DA also noted that any outside investor could buy the same judgments if the board declined.
After discussion the board approved the motion by voice vote. The transcript records the board voting in favor and no individual roll-call tallies were announced.
The meeting then proceeded to routine items including a forfeiture report and several retirement approvals. The board did not record a policy change or numerical limit on judgment purchases during this meeting; trustees discussed that any such "line in the sand" could be adopted through the board's bylaws or investment policy and that the DA's office should be consulted if a limit is set.
