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No question, the OPS fund has a long way to go. Financial experts say pension programs should be 80% funded to be fiscally sound. The OPS fund currently is at 63%.

Omaha Public Schools has an obligation not only to educate students well but also to manage its pension system well. After a recent period of disastrous management and embarrassment, the pension system is under more stable operation.

Earlier this year, the OPS board called for everyone who’s in the game to lose a little skin: OPS retirees and employees would see lower cost-of-living adjustments. Newly hired employees would get less generous pensions. The district would kick in more money annually, increasing next year from the current $21 million to $35 million, without a tax increase.

That gives the fund a chance to cut into its unfunded liabilities, which have soared from $138 million in 2008 to more than $800 million now. This new OPS strategy is sensible and sustainable.

The appointment of a capable former state senator, Patrick Bourne of Omaha, to the board overseeing the fund provides an occasion to review what OPS has done and where it should be heading on the pension front.

The fund, managed by the Omaha School Employees’ Retirement System’s trustees and administrator, operated pretty well for years, but OSERS led the fund into disaster in the wake of the 2008-09 recession. Fund managers shifted pension investments out of traditional stocks and bonds so excessively — and into questionable investments such as real estate in India and oil in Kazakhstan — that OPS largely missed out on the post-recession market recovery.

Another grave mistake was OSERS’ shift of more than half the fund’s $1.2 billion in assets to investments connected to a single entity: the fund’s longtime financial adviser based in Connecticut. That adviser and its associated firms collected millions in fees on often-poor investments.

In all, an investigation by The World-Herald’s Henry Cordes found, these mistakes cost the OPS pension fund some $500 million.

These troubles have spurred needed change. The state in 2016 transferred investment authority to the Nebraska Investment Council, which invests assets for statewide pension systems.

The Nebraska Legislature decides changes in retirement law, and it’s encouraging that State Sen. Mark Kolterman of Seward, chairman of the Legislature’s Retirement Systems Committee, has a positive working relationship with OPS Superintendent Cheryl Logan. The appointment of Bourne, who served eight years on the retirement committee, is a positive step for the OSERS board.

No question, the OPS fund has a long way to go. Financial experts say pension programs should be 80% funded to be fiscally sound. The OPS fund currently is at 63%.

Even with the sound strategy put forward this year by OPS, it will take a projected 17 years to bring the pension system back to relative solvency. In other words, fixing the system’s pension mess will require close ongoing attention by OPS, year after year. The system must not drop the ball again.

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