Ten men and a woman who will control the investment of billions of dollars in District of Columbia employes' pension funds have been sworn in as members of the new D.C. Retirement Board by Mayor Marion Barry.
As members of the board, they are the custodians of one of the biggest repositories of investment capital in the Washington metropolitan area. They will manage all pension funds for the city's teachers, police officers, firefighters and judges, an outlay that exceeds $125 million a year, and a federally financed fund, growing by $52 million a year, that will help finance the pensions of future retirees.
Overall, the board will manage the investment of at least $6 billion in public funds and workers' contributions between now and the year 2004.
The importance of the board to city workers and retirees and its potential financial power were underscored by the elaborate swearing-in ceremony at the District Building last month.
Held in the City Council chambers, it was attended by City Council Chairman Arrington Dixon, other members of the council and the school board, the police and fire chiefs, leaders of the workers' unions, representatives of key congressmen and senators and retired workers. Afterward, city officials, workers and board members introduced themselves over glasses of wine -- French red, domestic white.
The board was created by the D.C. Retirement Reform Act, which establishes for the first time a standing pension fund to be invested for the future. Until now, most pensions for retired teachers, firefighters and police officers have been paid out of operating funds in the annual budget.
With the advent of home rule, the District of Columbia inherited a staff of several thousand employes who had years of built-up pension rights, but no funds to cover those obligations. That was because pensions in the past were paid directly by the U.S. Treasury, like those of federal retirees. Congress is now putting up $52 million a year to meet some of those obligations, and the Retirement Board will manage those funds as well.
Barry appointed three of the board's 11 members: James L. Koltes, a vice president of the investment house of Kidder, Peabody & Co.; Harriette T. McGinnis, a trust officer at Riggs National Bank and vice president of the National Association of Urban Bankers; and Arthur M. Reynolds, a lawyer who is also a certified public accountant.
Two members were appointed by the City Council: Frank A. Higgins, former fund director for the Machinists' union pension fund, and Oliver R. Sockwell, chief marketing officer at the Student Loan Marketing Association.
The other six members were elected by present and retired teachers, police officers and firefighters. They are Solomon J. Kendrick, chief examiner of the board of examiners for the D.C. Public Schools; E. Fillmore Mitchell, former president of the D.C. Retired Teachers Association; Kenneth M. Cox, vice president of Local 36, International Association of Firefighters; Alden C. Kefauver, Jr. retired deputy fire chief; Thomas P. King, vice president of Local 442, International Brotherhood of Police Officers; and Clarence H. Lutz, retired deputy chief of police.
Barry told them that in the opinion of the city's financial advisers, "our pension situation is one of the worst in the nation" in terms of meeting its future obligations. He said he would ask Congress in this session for more money to "pay its debts to our fine men and women" who worked for the city before home rule.