"Enron and STRS Benefits"
February 2002
Issue No. 2

Dear Delegate:

We ask that you share this information with STRS members in your schools as soon as possible.

We provide this bulletin to address concerns many of our members have expressed about the "Enron fallout."

Media reports that speculate public pension benefits like those provided by STRS are at risk are not accurate. STRS retirement benefits have not been (and will not be) impacted by the Enron collapse. The System's well-diversified portfolio remains strong and we continue to be fully funded.

NYSTRS administers a defined benefit plan, meaning benefits are calculated based on set formulas using a member's years of service credit and final average salary. As such, the return on one particular investment has no bearing on benefit payments. Also, in New York State, public pension benefits are constitutionally guaranteed and cannot be diminished.

Like most other public pension funds, STRS had Enron stock in its portfolio. However, the percentage of Enron stock we owned was very small (0.04%) and therefore had a negligible effect on our fund's $78 billion in total assets. In short, because of the diversification of its investments, STRS remains fully funded and actuarially sound.

The System will consider being part of a class-action lawsuit against Enron if any shareholder action is taken.