Texas public employee pension funds outperform investment targets and global benchmarks in 2021
AUSTIN, TX, April 26, 2022 /PRNewswire/ — Pension plans for Texas city fire, police and municipal workers exceeded actuarial return on investment targets for the past 20-year period and exceeded 60/40 global returns over the 10- and 15-year periods.
The findings were compiled from a annual survey conducted for the Texas Association of Public Employees Retirement Systems by Maples Group, a market leader in the provision of legal, trust, funds, regulatory and compliance services. Forty (40) Texas pension funds representing approximately $26.69 billion of total assets having responded to the survey for the period ending September 30, 2021.
Together, their FY2020 dollar-weighted portfolios allocated 52% to domestic, international and global equities; 25% to alternative strategies; 23% to fixed income securities; and -0.6% to cash and short-term securities. The alternative strategies component included private equity, real estate, venture capital, tradable alternative strategies, commodities and diversified infrastructure.
The study confirmed that local pension systems that provide secure retirement benefits to civil servants successfully exceeded their average return target of 7.3% with an average annual return of 7.7% for the 20-year period. . For the 15-year period, the survey respondents’ average annual return of 6.85% outperformed the Global 60/40 portfolio return of 6.0% for the same period. For the 10-year period, their return of 8.86% outperformed the return of the Global 60/40 portfolio by 7.99%.
“When dedicated public employees retire after more than 20 years of service, their retirement security depends on the investment performance of pension funds meeting or exceeding investment targets,” said James Smith, Chairman of the Board of Directors of TEXPERS. “Even though pension systems have lowered their target returns due to reduced expectations for global economic performance, the pension systems’ diversified portfolios have paid off. The city sponsors’ partnership with their pension systems to maintain Appropriate funding has been a major contributing factor to the success of Texas pension funds.”
TEXPERS released its “Annual Report on the Asset Allocation and Investment Performance of Texas Public Employees’ Retirement Systems” at its annual conference for pension fund administrators and staff in fort worthdetained April 3-6. About 523 people attended the event at the Worthington Renaissance Hotel.
NOTE TO EDITORS: The Global Aggregate Index referred to in the fourth paragraph is a combination of 60% MSCI ACWI Equity Index and 40% Bloomberg Barclays Global Aggregate Fixed Income Index.
The Texas Association of Public Employee Retirement Systems is a nonprofit voluntary association that provides educational and legislative advisory services to trustees, administrators, professional service providers, and employee groups who manage retirement money for police officers, firefighters and municipal and district employees in cities across Texas. TEXPERS has pension systems of 68 members who manage $32.7 billion pension assets for 57,728 active policyholders and 60,737 retirees and beneficiary pensioners.
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SOURCE Texas Association of Public Employees Retirement Systems