Letter from the President
One of the decisions Hoosier voters will be asked to make when they go to the polls
on Nov. 5 involves a constitutional amendment that would allow public employee pension
funds to diversify their investments. Under current Indiana law, the retirement
funds of state and local employees may be invested only in government and corporate bonds.
Only one other state has such a restriction. The amendment -- to Section 12, Article
11 of the state Constitution -- would allow the funds to invest in stocks and other securities.
The proposed change is one that is overdue, and I hope voters will approve the amendment.
This constitutional provision was enacted in 1851 with the good intention of protecting
retirement funds from dangerous speculation. However, its effect today is to limit unnecessarily the earnings of the funds. These lost earnings ultimately require
increased state spending and cost taxpayers money. A study by the Indiana Fiscal
Policy Institute indicates that diversifying the pension fund investments would save
taxpayers $43 billion over the next 30 years.
While investments in stocks and securities are never risk-free, experienced money
managers know that a carefully handled portfolio of holdings from sound companies
can be both safe and profitable. Purdue has followed this policy with its endowment
investments for many years, and the result has been steady growth.
In addition to employees of the state and the various municipal units, public school
teachers and some university employees are affected by the restriction. While the
majority of Purdue employees are covered by TIAA-CREF -- a privately managed fund,
not covered by the restriction -- the pensions of more than 4,000 of our clerical and service
staff members are deposited in the Public Employees' Retirement Fund. These people
deserve to have their money grow as much as possible.
The pension fund amendment is one of those rare changes that appear to be good for
everyone involved. I hope our citizens will vote "yes."
Fall enrollment has soared for the Purdue system. The final total on the West Lafayette
campus is 35,176, an increase of 471 students. While the totals for the regional
campuses are not complete, we expect to have more than 64,000 students enrolled,
a significant increase.
Enrollment increases are the exception, rather than the rule, at a time when the number
of high school graduates is relatively low. I think Purdue has been one of the exceptions
for several reasons:
- Excellent quality. Our faculty has been uncompromising in maintaining academic standards,
and this translates into an education that has a very high value in a highly competitive
- Outstanding job placement. The Purdue reputation is well-known to employers, and
they continue to recruit our students aggressively.
- Affordability and high value. Purdue fees rank near the bottom of the Big Ten, while
the value of the education ranks among the highest in the nation.
- Strong marketing. Not only the Office of Admissions, but also many faculty members
and administrators in all disciplines and on all campuses are actively involved in
telling the Purdue story to potential students.
- Great facilities. Purdue maintains its campuses at a level that very few universities
- Institutional values. The University often is described as "conservative," and although
the term sometimes is used in an unflattering context, it really describes an institution
that is secure in itself and isn't easily swayed by the philosophical, social, and political trends that frequently sweep through academia. Students, parents,
employers -- indeed, all of Purdue's many constituencies -- have learned to appreciate
a university that sets high standards in every endeavor and is proud of its excellence.
Steven C. Beering
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