Oil, gas stocks outperform other assets in state pension funds, study finds

4/28/2015

WASHINGTON -- Returns on state pension funds from investments in oil and natural gas companies continue to provide strong earnings for public pension retirees, including America’s teachers, firefighters and police officers, according to a Sonecon study released Tuesday by API.

On average, $1 invested in oil and natural gas stocks in 2005 was worth $2.30 in 2013. By contrast, $1 invested in all other assets over the same period was worth $1.68.

"During good economic times—or challenging ones—oil and natural gas investments far outperformed other public pension holdings," said API V.P. of Regulatory and Economic Policy Kyle Isakower. "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, on average, 4% of holdings in the top public pension funds, they accounted for, on average, 8% of the returns in these funds from 2005 to 2013, according to the Sonecon study.

The owners of America's oil and natural gas companies are largely retirees and middle class Americans saving for retirement, according to a separate report by Sonecon, Who Owns America’s Oil and Natural Gas Companies.

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

The report examines the top two public pension funds in 17 states, which collectively cover more than half (55%) of all workers in the U.S. 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.

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