<em>Company cars with free gas, even for personal use. Stays at luxury New York City hotels such as The Plaza and the Waldorf-Astoria. Expensive dinners and open bars. </em></p><p><em>The people who run Missouri&#8217;s teachers retirement system &#8212; at $27 billion one of the nation&#8217;s biggest pension funds &#8212; have been living like there&#8217;s no tomorrow, an examination by <em>The Kansas City Star</em> has found.</em></p><p>While other pension funds are closely watching expenses during tough economic times, top executives of the Public School and Education Employee Retirement Systems of Missouri are spending thousands of taxpayer dollars on themselves, records show.</p><p>What&#8217;s more, <em>The Star </em>found that some retirement system executives openly accept gifts, meals and travel from investment companies that they are in charge of hiring and firing. In many other states, such actions are prohibited and in some cases have led to criminal charges.</p><p>Not in Missouri, where lax fiscal and ethical oversight allows top executives of the teachers retirement system to spend money just about any way they want.</p><p>&#8220;We really stress fiduciary independence,&#8221; said M. Steve Yoakum, the system&#8217;s executive director, in defending its spending practices and relationships with investment managers. &#8220;Then we say, as a check on that, don&#8217;t do anything that you don&#8217;t want to read about on the front page of <em>The Kansas City Star. </em>&#8230; And generally, that works for us internally on our staff and it works for the board as well. Just don&#8217;t do anything stupid.&#8221;</p><p>But some teachers, who make on average $43,229 a year and invest their retirement savings in the fund, were outraged to learn of the spending practices.</p><p>&#8220;Those people are taking advantage of us,&#8221; said Oren Bates of Peculiar, who retired from teaching in the Hickman Mills School District in 1992. &#8220;I see and hear and read of that in the big corporations, but in this case, it&#8217;s my money and the taxpayers&#8217; money that they&#8217;re spending.&#8221;</p><p>Ethics experts also expressed surprise at some of the spending.</p><p>&#8220;I frankly have never heard of free cars,&#8221; said John Hood, president of the John Locke Foundation, a public policy think tank based in North Carolina. &#8220;You either get mileage or you get a car. But you don&#8217;t typically get a car plus whatever fuel you want.&#8221;</p><p>The retirement system collects more than half a billion dollars a year from public school districts &#8212; other than Kansas City and St. Louis, which have their own systems &#8212; and half a billion more from its membership, which includes administrators and non-teaching personnel.</p><p>But the retirement system, which was overfunded with a surplus from 1996 to 2000, was only 83.5 percent funded last year. That left it with an unfunded liability of $5.3 billion, even before the current market turmoil.</p><p>Indeed, the overall investment return for the Missouri teachers pension fund for the first quarter of fiscal year 2009 (which ended Sept. 30) was -9 percent &#8212; well below the actuarial required return of 8 percent. Fiscal 2008&#8217;s return was -4.6 percent. In fiscal 2007, the return was 16.6 percent.</p><p>However, retirement system executives said the negative return is better than that of other public funds on Wall Street&#8217;s rollercoaster ride. If markets are down 20 percent, they assured, the teachers fund expects to be down only about 10 percent because of diversification.</p><p>&#8220;Sure, it&#8217;s a concern. We know there are going to be years that are bad years. This is just a difficult game that we&#8217;re finding ourselves in now,&#8221; Yoakum said of the current market conditions, but added &#8220;over the long run, we think we&#8217;ve designed a portfolio that will weather those storms and give us those returns.&#8221;