State Treasurer investment fund hits record

Treasurer-state-oregon
By Oregon State Treasurer

Investment gains push Oregon Common School Fund to record level

Treasury-managed trust fund provides money for K-12 classrooms across the state
Oregon schoolchildren of today and tomorrow will benefit from the continued success of the Common School Fund, which reached a new record market value at the end of the third quarter.

The Common School Fund is a trust fund established at the time of statehood and it provides a lump payment every six months, based on the fund’s size, to help pay for public education in Oregon.

As of Sept. 30, the value of the Oregon Treasury-invested trust fund climbed to $1.28 billion, fueled by market gains and a successful long-term investment strategy. The fund has rebounded strongly since being buffeted in the global financial crisis: In March 2009, the value stood at about $720 million.

The fund’s annual average return during the past five years was 9.4 percent, exceeding its comparison benchmark. Over that same period, the state’s 197 school districts shared disbursements from the fund totaling $240.8 million.

“Education is the key to a more prosperous future,” said State Treasurer Ted Wheeler, a member of the Oregon Investment Council. “Our successful strategy for the Common School Fund is working, and is resulting in more resources to help students thrive.”

Historically, about 4 percent of the fund has been distributed to school districts annually. The distribution rate, deemed sustainable by current market and fiduciary standards, is determined by the State Land Board, made up of the Governor, Secretary of State and State Treasurer.

In 2013, $53 million was distributed to Oregon schools.

The fund is administered by the Department of State Lands, which controls deposits and withdrawals and oversees Common School Trust Lands. The fund receives income from a number of sources including leases of state-owned waterways, revenue from forestlands, and the value of estates that escheat to the state. Unclaimed property is held in the Common School Fund until claimed by the rightful owners.

To increase the value of the fund, the balance is invested by the State Treasury under the guidance of the Oregon Investment Council. The fund today is primarily invested in stocks, fixed income and select private market assets.

The Oregon State Treasury protects public assets and saves Oregonians money through its investment, banking, and debt management functions. State investment policies are overseen by the Oregon Investment Council. The State Treasury also promotes public outreach and education to help Oregonians learn strategies to save money, invest for college and make smart financial choices.


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