State pension funds drop $25 million

Thursday, June 27th 2002, 12:00 am
By: News On 6

OKLAHOMA CITY (AP) _ Oklahoma's two largest public pension funds have lost about $25 million because of the WorldCom Inc. accounting scandal, officials said Thursday.

Tommy Beavers, executive director of the Oklahoma Teachers Retirement System, said the fund had sold its holdings in WorldCom after losses totaling almost $17 million.

Steve Edmonds, director of the Oklahoma Public Employees Retirement System, said that fund had only a nominal investment of $256,000 in WorldCom stock, but held $17.8 million in bonds as of last Friday.

Kirk Stebbins, chief investment officer at OPERS, estimated that the bonds had lost $8 million in value since the announcements of WorldCom's troubles.

Stebbins said the bonds were held by two of the fund's money managers. He said the WorldCom scandal was disheartening to investors who rely on company financial data that was ``so glaringly'' in error. ``It's a shock to us all,'' he said.

Edmonds stressed that the holdings in WorldCom were ``one-fourth of one percent'' of the $4.5 billion public employees fund.

Beavers said the teachers' fund totals about $6 billion, so the $17 million ``is relatively a small amount of our total portfolio.''

``For every $1,000 a teacher has invested in the teachers' retirement system, we've lost about $2.83 because of WorldCom,'' Beavers said.

Still, the losses from WorldCom are much bigger than they were after the Enron scandal, he said. The teachers' fund lost about $2 million because of Enron, or about 41 cents for every $1,000 invested.

WorldCom, the nation's second-largest long-distance telephone carrier, was hit with federal civil fraud charges this week. The government accuses the company of disguising nearly $4 billion in expenses from the investing public.

WordCom employed Arthur Andersen LLP to do its books. Anderson was convicted earlier this month on a felony charge in the Enron case. Officials at Anderson say the complied with accounting standards and blame the WorldCom debacle on the company.