Kansas recently issued $1 billion in bonds and gave the money raised to the state’s pension plan to invest. This all took place right around the time the stock market started to show signs of a downturn.
However, KPERS Executive Director Alan Conroy isn’t worried. He doesn’t believe recent market losses will have a long-term impact on the investments.
“As a large, institutional investor that’s in for the long haul, that 50-year outlook, there’s going to be lots of ups and downs over 50 years. We’re not day traders,” Conroy says.
Conroy says Kansas was able to borrow the money at a very low interest rate. The hope is that the investment return on the money will outweigh the costs of borrowing the cash. Some critics of the move have questioned if it’s wise to be taking on debt when the state has such a tight budget.
The state was already expected to eliminate a KPERS shortfall in the coming decades. Conroy and Gov. Sam Brownback say issuing the bonds makes it easier to reach that goal.
