API: Study shows oil and natural gas holdings key to public pension fund performance in Illinois

State pension fund investments in oil and natural gas companies are providing strong returns for teachers, firefighters, police officers, and other public pension retirees in Illinois, according to a Sonecon study released by API. Returns on oil and natural gas assets in the top two state funds averaged 41 cents for each dollar invested compared to just 2 cents for other assets in these funds from 2005 to 2009.

‘During good economic times ‘ or challenging ones ‘ oil and natural gas investments far outperformed other public pension holdings,” said Kyle Isakower, API vice president of regulatory and economic policy. ‘We already know that a healthy domestic oil and natural gas industry is good news for jobs and government revenue, and we now know that it also provides stability to the nest eggs that millions of Americans are counting on for a secure retirement.”

While oil and natural gas stocks make up an average of 3.9 percent of holdings in the top public pension funds, they accounted for an average of 10.6 percent of the returns in these funds over the five-year time period, according to the Sonecon study.

America’s oil and natural gas companies are owned by tens of millions of Americans, according to a 2007 Sonecon study.

‘Millions of Americans with a 401k, mutual fund, or pension also rely on the income and capital growth these companies provide for their retirement,” Isakower said. “And all Americans benefit from the job creation and economic growth supported by the more than $2 trillion invested in U.S. capital projects over the past decade, including more than $58 billion in low and zero emitting technologies.”

The full report examines the top two public pension funds in 17 states, which collectively represent and cover more than a trillion dollars in assets and covers nearly half (48.1 percent) of all workers in the United States who participate in state and local government pension plans.  

States analyzed in the report are: California, Florida, Illinois, Indiana, Iowa, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Mexico, New York, North Dakota, Ohio, Pennsylvania, South Carolina, and West Virginia.  API released an interim report on four of the states in April. 

API represents more than 470 oil and natural gas companies, leaders of a technology-driven industry that supplies most of America’s energy, supports more than 9.2 million U.S. jobs and 7.7 percent of the U.S. economy, delivers almost $86 million in revenue to our government every day, and, since 2000, has invested nearly $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.