State-funded pension systems have millions invested in British Petroleum, whose stock price has plummeted since the onset of the Gulf oil spill disaster.

State-funded pension systems have millions invested in British Petroleum, whose stock price has plummeted since the onset of the Gulf oil spill disaster.

However, the funds are not rushing to divest themselves of the stock, which represents only a small part of the total assets held by the five funds.

The Teachers Retirement System, which handles pensions for teachers outside the city of Chicago, held about $46 million in BP investments as of Monday, said TRS spokesman Dave Urbanek. About $42.3 million was held in an international equities portfolio and $3.7 million through an index portfolio. In both cases, Urbanek said, the BP investments amounted to .74 percent of the portfolios.

“Decisions to trade and what to do with any individual investment are made by outside managers,” Urbanek said. “They make the day-to-day decisions. The board hasn’t made any decisions to divest.”

About $15 million in BP stock was sold in April, Urbanek said, and in late May and early June about $1 million was bought back. TRS has assets of about $33 billion.

The Illinois State Board of Investment, which handles investments for pension funds covering state employees, judges and state lawmakers, held just under 1.1 million shares of BP in indexed accounts, said William Atwood, executive director of the board. The accounts are managed by outside managers and “we let the managers to their thing,” Atwood said.

The board has more than $8.7 billion in total assets.

The State Universities Retirement System said no one was available Tuesday to discuss SURS investments in BP. The system’s last annual report showed it held more than 3.8 million shares of BP. The system has about $12 billion in total investments.

A bigger concern for the pension systems is how the state is going to make the $3.7 billion payment owed to pensions next year. A bill to borrow up to $4 billion for the payment passed the House, but not the Senate.

Gov. Pat Quinn said in Chicago that he still expects the Senate to act before the new budget year starts July 1.

“I think there’s enough votes there now,” Quinn said without elaborating.

Not all Senate Democrats support the bill, meaning some Republican votes are needed for it to pass. However, Republicans have remained unanimously opposed.

Quinn said borrowing the money will cost the state about $1 billion, while skipping the pension payment ultimately will cost $20 billion in lost investment income.

“I do expect the Senate to come together before the end of the month and vote on it,” Quinn said. “If they want to do it on the last day of the month, so be it. My understanding is the last few days of the month, they will be raring to go.”

Senate President John Cullerton, D-Chicago, told senators last month they could be called back to Springfield to vote on the pension borrowing plan. But he also said there had to be a commitment from at least two Republicans to support it.

Cullerton spokeswoman Rikeesha Phelon said in an e-mailed statement, “At this point we have seen no evidence that the plan is gaining support.”

 

Doug Finke can be reached at 788-1527.