For Immediate Release
October 9, 2020
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Public School Employees' Retirement System
Pennsylvania Public School Employees' Retirement System Board Approves Audit Report and Financial Statements
Financial Statements reflect the pandemic impact on the System’s Investment Assets
HARRISBURG – The Board of Trustees of Pennsylvania’s Public School Employees’ Retirement System (PSERS) voted Friday on resolutions approving the June 30, 2020 Independent Auditors’ Report, the 2019-2020 Financial Statements, and three private markets investments.
The votes occurred at the Board’s public meeting, which was held both in-person and online due to the Commonwealth’s ongoing COVID-19 safety protocols limiting public gatherings. Various Board committee meetings also were held on Thursday under the same safety protocols.
The Independent Auditors Report, prepared by the accounting firm CliftonLarsonAllen (CLA), found PSERS’ financial statements were presented fairly in accordance with generally accepted accounting principles. PSERS received an unmodified or clean opinion from CLA. The audited Financial Statements will be published in PSERS Comprehensive Annual Financial Report when it is finalized later this year.
PSERS’ Financial Statements show the Fund’s net position fell by $105 million (0.18%) to $59 billion between June 30, 2019 and June 30, 2020 despite the pandemic's adverse impact on capital markets. The decline also was driven by benefit payments of $6.8 billion slightly exceeding investment income and employee and employer contributions of $6.7 billion.
Preliminary investment data shows PSERS’ net annual return was 1.13% for the 2019-2020 fiscal year, resulting in a net investment gain of about $1 billion for the fiscal year that ended June 30, 2020. The official fiscal year investment return will be finalized later this year. In addition, PSERS’ preliminary net annualized return over the past 10 years ended June 30, 2020, was 7.70%, exceeding PSERS’ long-term investment goal of 7.25%.
“While the one-year investment returns were negatively impacted by the effects COVID-19 had on the capital markets, the Fund’s 10 year net returns exceeded the actuarial investment return assumption. In addition, the ongoing commitment of the Governor and the General Assembly to fund the full actuarially required contributions continues to make a positive difference in the overall long-term financial health of the System,” said PSERS Executive Director Glen Grell.
During the meeting, the Board also approved the following investments, subject to legal contracts being finalized: $100 million to Greenoaks Capital Opportunities Fund III, $100 million to Polaris Fund V, and $168.75 to Insight Partners Opportunities Fund I.
About the Pennsylvania Public School Employees' Retirement System
PSERS, founded in 1917, began operations in 1919 to oversee a statewide defined benefit pension plan for public school employees. PSERS' role expanded upon the passage of Act 5 of 2017 to include oversight of two new hybrid options consisting of defined benefit and defined contribution (DC) components and a stand-alone DC plan. As of June 30, 2020, PSERS had net assets of approximately $59 billion and a membership of about 256,000 active and 234,000 retired school employees.