University Daily Kansan / Friday, September 13, 1991
5
KPERS failed to follow guidelines for investments, consultant says
By William Ramsey Kansan staff writer
TOPEKA - Risky investments concerned the consultation firm for the Kansas Public Employees Retirement System, but the firm's president said yesterday that he did not push to halt them.
Ronald Peyton, head of Callan Associates, Inc., testified in front of the Joint Committee on KIDS RES Investments which weighs its fifth round of hearings today.
KPERS has lost money since fiscal year 1989, with it's largest loss in fiscal year 1990 — $65 million. The money was stored in the Home Savings Association.
Because of the losses, state employees' pensions are in jeopardy.
The investigative committee has been trying to determine who is responsible for making the risky investments. So far, it hasn't found
anyone who will admit having that responsibility.
Peyton told the investigative committee that his company was hired simply to plan an investment portfolio and not to manage direct investments.
"We think these guidelines were pretty good," Peyton said. "Had they been followed, there might be less of a messright now."
nistress
State Sen. Wint Winter Jr., R-
Lawrence, who heads the committee,
questioned Callan's relationship as an
investment consultant to the KPERS
Board of Trustees.
"It sure seems to me that at best there was a gross miscalculation on the part of the board and the staff of the company your firm was playing," Winter said.
Peyton's company is responsible for planning a portfolio, preparing investment guidelines and calculating the rates of returns from investments.
of direct-placement investments which, together with real estate investments, accounted for 19 percent of the total portfolio in fiscal year 1990.
Separate managers were in charge
In fiscal year 1991, the board replaced the two direct-plplacement
During yesterday's committee hearing, Winter questioned Peyton about a 1982 objection he had written in response to a plan that risky direct-placement investments.
Peyton said that he had originally cautioned board officials but said that he was afraid to push them once the process began.
State Sen. Dave Kerr, R-Hutchinson, suggested having an investment analysis coach on the in-house staff oversee investments as a KPERS member.
The Associated Press contributed information to this story.
City officials plan trade mission to Japan
By Heather Anderson Kansan staff writer
Lawrence residents are planning to go on a mission.
The groupup residents, which includes Mayor Bob Walters and City Manager Mike Wilden, is planning a mission to Japan during November.
The purpose of the mission is to make business contacts with Japanese companies that would like to start up in Kansas and individuals who would like to make investments in the state, said Ken Evans, public information officer for the Kansas Department of Commerce.
Staff members from the state department of commerce will accompany the Lawrence group on the trip. Staff and students from Japan delegates to Japan during the mission.
Evans said the trip was one of several trade trips that the department takes each year to Japan and Europe.
"For the moment, most of the business opportunities are in Japan," he
Evans said Kansas officials have targeted three Japanese industries to attract. They include pharmaceutical distribution and food-related industries.
The mission also will help Lawrence establish better relations with Hiratsuka, Lawrence the Japanese sister city, said Gary Toebben, executive director of the Lawrence Chamber of Commerce.
He said that this would be his third trin to Japan.
Toebben said that Lawrence would have a booth at the Hiratsuka industrial fair. This will give the group a chance to tell Japanese companies about life and industry in Lawrence, he said.
He also said he would like to invite other business people who want to promote Lawrence to Japanese industries.
Walters said he thought it was important for government officials to participate in these trade missions to help promote the city. He said the trip would give Lawrence a chance to show what it had to offer.
City commissioner Shirley Martin-Smith also thought that local government officials should participate in such trips.
She said she saw evidence of this when she went to Japan last year. She was mayor of Lawrence at the time.
Martin-Smith said she thought that this trip could be especially beneficial for Lawrence because it would benefit the Higuchi Bioscience Centers, which do pharmaceutical work on KU's West Campus.
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