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And welcome everyone to this report on the State of Washington's pension system for Stanford's finance and retirement and pensions MOOC this is brought to you by team western Washington, and I'm Todd Yuzuki in addition to gathering the required information for our team project we also interviewed a board member from the Washington state investment board we interviewed the state actuary for the state of Washington, and we talked with the communications' director for the department of retirement systems, and we also had an exclusive interview with President George Washington, and it's an honor to be joined today with the father of our country and for whom our state is named President George Washington thank you for joining us pleasure Todd while I want to get some insights from you is it important from your standpoint for the state of Washington to have a healthy pension system in order to provide a pension benefit to state employee's upon retirement yes and is it important for the health of that pension system be communicated in a clear and effective manner to the taxpayers and all stakeholders involved well of course it is Todd hmm President Washington thank you very much for your insights today and in talking about the Washington state pension system it's a system with 75 billion dollars in assets and there's four hundred eighty-six thousand participating members, and it's relatively healthy state budget solutions did a report that show that the Washington system was a fifth best funded system in the US and in terms of unfunded liabilities as a percent of state gross product Washington ranks seventh and the Pew Center on States did a study that showed that Washington's pension system was the fourth best funded nationally and in terms of funds Washington state is unique, and they've done well the mission for the Washington state investment board is to maximize returns with risk and in talking with the Washington state investment board member he says they're unique because they have a high asset allocation to private equity twenty-four percent and real estate fourteen percent they are confident that they can beat market returns or their private equity holdings even after fees the funds good performance was shown in a Bloomberg study that looked at tender returns and Washington's was shown to have the highest return of public pension systems of over 20 billion dollar and assets they attributed that to the high allocation of private equity and real estate, so the system has done well a question we have is what is the level of risk relative to market index funds with this asset allocation in our analysis we have two concerns but both of them appear to be addressed through legislation the first concern having to do with an underfunded situation of the two oldest funds in the system the public employees retirement system plan one purrs one and a Teachers Retirement System plan one turns one they're under funded at sixty-nine percent in seventy-nine...
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