LITTLE ROCK — A Yankee fella I knew was puzzled and a little bit upset when a Southern belle called him "a mess."
Having grown up in Arkansas, I explained to him that there are two kinds of messes. The difference between them is whether the person delivering that pronouncement is grinning.
Trust me when I say that nobody grins when saying that the Arkansas Teacher Retirement System is a mess. Not that ATRS doesn't chug right along most of the time, doing what it was set up to do with a conscientious eye toward service and fiduciary responsibility to its thousands of participants, but when it messes up, it's a lulu.
The example that stands above all the others is the Arkansas Teacher Retirement System Affordable Housing Investment Act of 1999 and its spawn, a costly (multimillions projected even before the cost overruns started mounting up in Phase 1) retirement community for former teachers who never earned in a year what aone-year lease there would cost them. And I'm referring only to the cheapest accommodations initially proposed: modest studio apartments with a $59,500 per-unit buy-in coupled with a $1,198 monthly maintenance fee.
Following a distant second, but only monetarily speaking, was the Great Property Swap of 2001 in which the fellow who then headed ATRS exchanged a parking lot that ATRS had purchased for $426,000 for a parking lot that the fellow who at the time was the mayor of Little Rock had purchased for $120,000.
A few other items from news stories in recent years bear mentioning as well.
Feb. 2, 2002: "The executive director of the Arkansas Teacher Retirement System apologized Wednesday for his handling of its pricey proposed retirement community, for paying a manager too much and for expense abuse cited in a critical audit."
Feb. 20, 2002: "The members of an Arkansas Teacher Retirement System committee learned Tuesday that their manager of two nursing homes and a retirement center was paid twice as much as they thought they had agreed to pay him."
Nov. 19, 2003: "The Arkansas Teacher Retirement System understated the cost of its investments in private equity by $12 million and has other problems in its investment department that indicate an unqualified staff and inadequate training and supervision, according to a legislative audit of the system."
Nov. 12, 2004: "Investment managers for the Arkansas Teacher Retirement System failed to establish effective controls over investment transitions in real estate and limited partnerships, leading to errors involving several million dollars in the fiscalyear that ended June 30, 2003, a state auditor told lawmakers Thursday."
Sept. 26, 2005: "Officials of Arkansas' two largest public retirement systems, which have substantial overseas investments, have attended professional conferences in Brazil, Germany, Russia and many other countries during the past decade. The systems often have paid the conference fee, while the cost of travel has often been subsidized by various firms that are competing to manage millions of dollars in assets of the Arkansas Public Employees Retirement System and the Arkansas Teacher Retirement System."
Oct. 8, 2008: "Lawmakers groused Thursday about the executive director of the Arkansas Teacher Retirement System traveling out of state on115 of 246 workdays over 13 months and receiving reimbursement for trips to places where he has homes."
This year ATRS has been operating under new management. Former state Sen. George Hopkins took the helm as executive direction in December. I wonder how he thinks it's working out for him.
For the past couple of months, he's been dealing with a migraine of a mess in the form of pension payments made to retirees who didn't actually retire, but returned to work without notifying ATRS. The pension payments made to them over the years-how many years probably never will be known-run into millions of dollars.
Until July 1, when a new law took effect, retirees who returned to work were supposed to remit a portion of their pension payments to ATRS when they reached a predetermined income level. Many didn't. Initially, Hopkins tried to collect some of the money due the system, but the protests and appeals from irate employed pensioners, not to mention questions raised by the new law and other retirement laws governing state retirees, quickly put the kibosh to that idea.
No wonder Hopkins finally threw up his hands and decided to seek advice from the state attorney general about such weighty matters as conflicts in the laws of Arkansas, exemptions for one class of "retirees" and not another, i.e., equal protection under the law, and the statute of limitations, all wrapped up in untold millions of retiree dollars.
On second thought, mess doesn't begin to describe it.
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Associate Editor Meredith Oakley is editor of the Voices page.
Editorial, Pages 21 on 09/25/2009