ATRS & Israel Bonds — What Arkansas Teachers Should Know

What Arkansas teachers and retired educators need to know about ATRS pension investments in Israel Bonds.

What’s happening with YOUR pension

In June 2025, the Arkansas Teacher Retirement System (ATRS) Board approved Resolution 2025-22 authorizing an investment of up to $50 million in State of Israel Bonds. Board Chair Danny Knight cast the lone “no” vote and questioned the process. By December 2025, the full $50 million had been deployed in a single transaction through ATRS’s investment manager, Reams Asset Management — confirmed in a routine board liquidity update from ATRS Deputy Director Rod Graves.

Around the same time as the authorization, an internal memo from the State Treasurer’s senior investment officer Steve Pulley (late 2024) recommended pausing new Israel Bond purchases because of recent credit-rating downgrades. Together, these actions raise practical questions about risk, return, and how ATRS applies its own fiduciary standards.

Records from the second FOIA round reveal that ATRS formalized its Israel Bonds approach through Reams Asset Management, a division of Columbus Investments Inc. A document dated September 25, 2025 — nearly four months after the board authorized the investment — established “Investment guidelines for the Arkansas State Teacher Retirement Israeli Jubilee bond account.” The creation of a dedicated account with its own guidelines suggests Israel Bonds were treated as a special case outside ATRS’s normal fixed-income allocation, not a routine investment.

These are direct loans to the Israeli government that cannot be sold before maturity. Unlike most fixed-income investments, Israel Bonds have no secondary market — ATRS’s $50 million is locked in until the bonds mature.

Why it matters

Arkansas law says pension trustees must invest and manage assets solely in the interest of members and benefit recipients (Ark. Code Ann. § 24-2-614). The Protecting Arkansas Investments Act (Act 411 of 2023) requires the Treasurer of State to base investment evaluations only on pecuniary factors — those with a material financial effect on risk or return. Pension boards like ATRS are not yet covered by an equivalent procedural standard, which is why the Pension Investment Transparency Act would extend that same requirement to pension board sovereign debt acquisitions.

ATRS also follows a prudent-investor approach, which calls for care, skill, diversification, and documented due diligence before committing to a new, relatively illiquid position like foreign government bonds.

Here’s what the record shows:

  • The Board Chair dissented. On June 2, 2025, the ATRS Board adopted Resolution 2025-22 authorizing up to $50 million in Israel Bonds. Chair Danny Knight voted no and warned that selecting a specific bond at a trustee’s request was outside ATRS’s normal manager-driven process.
  • The Treasurer’s own staff recommended against it. A late-2024 memo from the Treasurer’s senior investment officer Steve Pulley advised holding off on new Israel Bonds because major credit-rating agencies had downgraded Israel’s credit, signaling higher risk.
  • A state official with no investment authority arranged the pitch meetings. On April 11, 2025, State Auditor Dennis Milligan, through his office, scheduled four meetings in 18 minutes — arranging back-to-back sessions for Israel Bonds sales executives with the heads of APERS, ATRS, and the Treasury, all in the Auditor’s Capitol office (Room 230). The Auditor has no investment authority over any of these funds. (See evidence finding 3e) A thank-you email from an Israel Bonds executive later used the $20 million Treasury purchase as sales leverage. Within weeks, a $20 million Treasury purchase followed, along with large authorizations at both pension funds.
  • Public statements emphasized politics, not financial merit. Officials have highlighted Israel Bonds as a way for Arkansas to “stand with Israel” — underscoring the need for clear separation between political symbolism and the Board’s legal duties to ATRS members.
  • No independent credit analysis was produced. Our review of more than 1,200 public records obtained through FOIA requests found zero independent credit analyses of Israel Bonds prepared before the authorization.
  • A tale of two pension funds. While ATRS hired a professional manager for its Israel Bonds, APERS chose to purchase directly with no external oversight — its CIO stated there was “not a need to incur management fees.” Both funds authorized investments through the same political channel, but arrived at different management structures. Neither produced independent credit analysis before authorization.
  • The full $50 million was deployed without independent analysis at any stage. The authorization moved from board vote (June 2, 2025) to investment guidelines (September 25, 2025) to full deployment (December 2025) — a six-month process in which the financial analysis that should have preceded authorization was never produced.
  • The dual standard is visible across systems. While ATRS hired Reams Asset Management and established formal investment guidelines (albeit four months after authorization), the underlying pattern is the same: at APERS, the same kind of rigorous process that produced 32 pages of Callan analysis for infrastructure investments was completely absent for Israel Bonds. ATRS members should ask whether their system’s Israel Bonds decision received equivalent consultant analysis to its other investment commitments. (Source: APERS Board Packet for June 11, 2025, publicly posted at apers.org.)

The key question: Israel Bonds now account for less than one-quarter of one percent of ATRS’s $23.7 billion portfolio, but they represent a concentrated bet on a single foreign government and are less liquid than many standard fixed-income options. Was this trade-off made based on sound financial analysis — or political pressure?

ATRS by the numbers

$23.7B Net assets (FY2025)
9.8% FY2025 return
#17 National ranking

According to ATRS’s own FY2025 Annual Report, the system holds $23.7 billion in net assets (and has since crossed $24 billion), posted a 9.8% investment return for FY2025, and carries an overall funded ratio of approximately 84% — meaning for every dollar owed to current and future retirees, the system has about 84 cents on hand. The unfunded liability stands at approximately $4.1 billion, with a 21-year amortization period to close the gap.

These numbers represent real improvement — the funded ratio has risen from roughly 80% in 2020, and the amortization period has shortened from over 30 years. But improvement in the aggregate does not mean every investment decision meets fiduciary standards. ATRS deployed $50 million in Israel Bonds — instruments that cannot be traded on any secondary market — without producing the independent credit analysis that prudent investment of retirement funds demands. When a system is working to close a $4 billion funding gap, the scrutiny applied to new illiquid commitments should be higher, not lower.

The Reason Foundation’s March 2026 Annual Pension Solvency and Performance Report ranks Arkansas #17 out of 50 states on funded status — a solid position nationally, but one that depends on consistent fiduciary discipline for every investment decision, including this one.

Sources: ATRS 2025 Annual Report; Executive Director Update, December 2025; Reason Foundation Annual Pension Report, March 2026.

For the full timeline, source quotes, and legal analysis, see our evidence page.

What you can do

1. Write to the ATRS Board

The full $50 million has already been deployed. Email the Board to request an independent financial review of the investment and transparent reporting to members.

Email: info@atrs.gov

Letter template — ATRS trustees

Subject line: Educators request independent review of Israel Bonds investment

Dear ATRS Trustees,

As Arkansas educators and ATRS members, we appreciate your service and ask that our retirement decisions remain strictly fiduciary. Arkansas law and ATRS policy require that investment choices be based only on pecuniary factors and made solely in members’ interests. That standard — prudence, loyalty, and process — protects our pensions from non-financial considerations and keeps decisions focused on risk, return, and long-term security.

In June 2025, the Board authorized up to $50 million in Israel Bonds. Board Chair Danny Knight cast the sole “no” vote, cautioning that selecting a specific security arising from trustee discussion could depart from ATRS’s usual practice of relying on professional managers. By December 2025, the full $50 million was deployed — without independent credit analysis at any stage. Around the same period, a late-2024 internal Treasury memo advised holding off on new Israel Bonds due to credit-rating downgrades.

Now that these funds are committed, we ask you to:

  1. Commission and publish an independent analysis of ATRS’s Israel Bonds position — comparing risk, return, liquidity, and alternatives — and share it with members.
  2. Document how the authorization and deployment complied with ATRS’s pecuniary-only standard and established manager-driven process.
  3. Ensure that any future sovereign debt commitments include independent analysis and member input before the board votes.

Thank you for safeguarding Arkansas educators’ retirements through prudent process and strictly financial analysis.

Sincerely, [Your name, role, and city]

2. Attend the next ATRS Board meeting

Public comment is your right as a pension fund member.

  • Location: ATRS Board Room, 1400 W. Third St., Little Rock
  • Public comment: Contact Board Secretary Tammy Porter at tammyp@atrs.gov to sign up
  • Written comment: Email info@atrs.gov with a subject line referencing the board meeting date
  • Upcoming 2026 dates: Check the ATRS Board Calendar for the current schedule

60-second public comment script: “Good morning, my name is [Name], and I’m an Arkansas educator and ATRS member. In June 2025, you approved Resolution 2025-22 authorizing up to $50 million in Israel Bonds. The Board Chair cast the lone no vote and raised concerns about the process. By December, the full $50 million was deployed — without independent credit analysis at any stage. The State Treasurer’s own senior investment officer had previously recommended pausing new Israel Bond purchases because of credit-rating downgrades. As members, we’re asking for accountability: please commission and publish an independent review of this investment, and ensure that future sovereign debt commitments include independent analysis and member input before the board votes.”

3. Share with your colleagues

Talk to other educators about what’s happening with your pension. Share this page directly — the more members who speak up, the harder it is to ignore.

Last updated: March 2026.