Your ATRS Pension — What You Should Know About Non-Tradable Sovereign Debt

What Arkansas teachers and retired educators need to know about ATRS pension investments in non-tradable foreign sovereign 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 non-marketable foreign sovereign debt — bonds issued by a foreign government that cannot be sold on any secondary market. 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 purchases of these bonds 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 approach to these bonds 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 these non-tradable sovereign bonds were treated as a special case outside ATRS’s normal fixed-income allocation, not a routine investment.

These are direct loans to a foreign government that cannot be sold before maturity. Unlike most fixed-income investments, these 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 State Government Employee Retirement Protection Act (Act 498 of 2023) requires pension board investment evaluations to be based only on pecuniary factors (Ark. Code § 24-2-802(4)(A)) — those with a material financial effect on risk or return — under the standard of care at § 24-2-803 and the pecuniary-factors-only requirement at § 24-2-804(a). The Pension Investment Transparency Act would add specific procedural safeguards for sovereign debt acquisitions: independent credit analysis, consultant independence, and documented financial rationale.

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 non-tradable sovereign 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 purchases of these bonds because major credit-rating agencies had downgraded the issuing country’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 the bond issuer’s 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 the bond issuer’s national managing director 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 these 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 these bonds prepared before the authorization.
  • A tale of two pension funds. While ATRS hired a professional manager for its sovereign bond investment, 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 these non-tradable sovereign bonds. ATRS members should ask whether their system’s sovereign bond 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: These 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 non-tradable sovereign 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. Contact your legislators about the Pension Investment Transparency Act

The 2027 Arkansas legislative session is the place to fix the procedural gap that ATRS’s deployment exposed. The Pension Investment Transparency Act would require independent credit analysis, consultant independence, and documented financial rationale before pension boards commit members’ retirement funds to non-tradable sovereign debt — closing the gap our FOIA documents revealed.

Find your legislators at arkleg.state.ar.us or text RESIST to 50409 to reach them through Resistbot.

Letter template — your state legislators

Subject line: Educators support the Pension Investment Transparency Act for the 2027 session

Dear [Representative/Senator],

As an Arkansas educator and ATRS member, I’m writing to ask you to support the Pension Investment Transparency Act in the 2027 legislative session. ATRS members earn our retirement through decades of classroom work, and we need the investment process behind that retirement to meet a documented fiduciary standard.

In June 2025, the ATRS Board authorized up to $50 million in non-tradable sovereign bonds. By December 2025, the full $50 million had been deployed. More than 1,200 public records obtained through FOIA show no independent credit analysis was produced at any stage of that authorization. Arkansas’s pecuniary-only standard under Act 498 of 2023 already governs these decisions — but the procedural specificity behind that standard (independent credit analysis, consultant independence, documented rationale) is what was missing.

The Pension Investment Transparency Act closes that procedural gap. It does not pressure pension boards to buy or sell any specific investment. It establishes the same documented due diligence standard for non-tradable sovereign debt that already applies to other investment classes.

Sound fiduciary process is non-partisan. It protects every Arkansas educator whose retirement depends on these funds.

Sincerely, [Your name, role, and city]

2. Attend the next ATRS Board meeting

Sitting in on board meetings is one of the most useful things an ATRS member can do. You see the documented process firsthand — the analyses presented, the questions asked, the way the record gets made — and that observation is exactly the kind of detail that strengthens the legislative case for PITA.

  • Location: ATRS Board Room, 1400 W. Third St., Little Rock
  • Public comment: Contact Board Secretary Tammy Porter at tammyp@artrs.gov to sign up
  • Written comment: Email info@artrs.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. I’m here to share that I support the Pension Investment Transparency Act being prepared for the 2027 legislative session. PITA would require independent credit analysis, consultant independence, and documented financial rationale before pension boards commit members’ funds to non-tradable sovereign debt — the same documented standard that already applies to other investment classes. As an ATRS member, I’m grateful for the rigorous analysis this Board commissions for so many of its decisions. Codifying that same level of process for sovereign debt acquisitions through PITA would simply make our existing practice the floor, not the ceiling. Thank you for your service to Arkansas educators.”

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.