Soaring fuel prices that are burning a hole in the wallets of consumers are not only benefiting oil companies and Middle Eastern producers. They are also lighting up the investment returns of pensions funds, which millions of ordinary Americans are counting on for their retirement.So if record oil profits are good for pension funds, which is in turn good for retirees or potential retirees, how do the Democrats stand to benefit from a windfall profits tax?
California's public employees' pension fund, the world's largest, made its first investment of $1.1 billion into oil and other commodities early last year, and since then, Calpers has seen it soar 68 percent. Fairfax County pension managers have enjoyed a 61 percent return from a similar move over the past 12 months, far outpacing any other segment of the fund's portfolio.
"Our commodity investment has really helped," said Robert L. Mears, executive director of Fairfax County's Retirement Administration Agency. "This year would have been a lot worse."
Other pension funds are rushing to get in on the action as the prices of oil, precious metals, corn, uranium and other vital goods continue to reach record highs. Montgomery County officials are in the process of shifting 5 percent of their $2.7 billion pension fund away from stocks and into commodities.
Monday, July 07, 2008
Pension Funds Boosted by Record Oil Profits
Not long ago I heard a radio ad from the American Petroleum Institute (I think) that talked about mutual funds that have invested in oil and petroleum companies and how those funds benefit from that investment. The ad also made note that something like 2/3 of all Americans owned stock in big oil via mutual funds. Now it looks like other big institutional investors are cashing in on big oil profits--just like they should. Thus not everyone thinks record oil company profits are a bad thing.