Gail Stone
Gail Stone graduated from Smith College with a bachelor’s degree in government. She began her investment career on Wall Street, working in the managed futures departments of Shearson and Merrill Lynch. Before coming to Arkansas in 1990, she was vice president in charge of trading for Altair Financial Corp., a managed futures firm in Greenwich, Connecticut.
She joined the Arkansas Public Employees Retirement System as an investment supervisor, moved up to director of investments and then was named deputy director before being chosen by the APERS Board of Trustees to serve as executive director in 2001.
What are your primary responsibilities at APERS?
I love this job because no day is the same as the previous one. I keep an eye on the investment program, of course, but I’m also charged with interpretation of the retirement statutes. One of the great things is engaging with legislators and other policymakers in consideration of different ways to keep the fund secure. In fact, serious involvement in the policy issues surrounding retirement in America has led me to positions as an officer on two national boards, the Council of Institutional Investors and the National Association of State Retirement Administrators.
What is the biggest challenge facing APERS, the state’s second-largest pension fund?
Getting the word out about what a powerful economic engine the pension system is for every single county in Arkansas. In the fiscal year just concluded, APERS paid out nearly $455 million in benefits. Better than 95 percent of that stayed in state.
When retirees know they’re going to get a guaranteed monthly benefit, they are going to spend it in the local economy for the goods and services they need. Each $1 paid out in benefits generates $1.29 in economic activity in Arkansas, while each $1 of taxpayer money invested in the system creates $5.60 in economic activity. Another focus for us is ensuring that costly legislation or “creative” interpretation of pension rules is stopped in its tracks. APERS provides a modest but secure retirement commitment for more than 77,000 Arkansans. I intend to keep it that way.
How does APERS ensure that its investment management fees are fair and reasonable?
At APERS, we don’t typically invest in strategies involving hidden fees. I’m proud to say that at around 36 basis points, we have one of the lowest net fee numbers among state-level retirement systems in this country. We regularly press on our institutional partners to lower their fees in order to retain our business over time.
Should governments eliminate pension funds and let public workers invest their own money in 401(k)s like the rest of corporate America? Why or why not?
Headlines from a very few, poorly structured pension systems decrying the fat pensions for public employees in the face of vast shortfalls in retirement reserves are simply not the reality in most states.
For instance, the average annual benefit paid by APERS is $12,666. We have prefunded 85 cents of every future dollar owed. Public sector workers are asked to do jobs that are frequently risky, like public safety, or that involve hard physical work, like road grading operations, for a very low salary. In exchange, these people are offered security in their retired years.
And as I stated above, this is all money that is spent in local economies of every county in the state. The Arkansas Public Employees Retirement System is absolutely the best bang for a taxpayer buck.
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