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PSERS Releases 2019-20 Comprehensive Annual Financial Report

11/13/2020

Nov. 13, 2020

For more Information Contact

Steve Esack
Press Secretary
Public School Employees' Retirement System
Phone: 717-720-4770
e-mail:  stesack@pa.gov


PSERS Releases 2019-20 Comprehensive Annual Financial Report

HARRISBURG -- The Pennsylvania Public School Employees' Retirement System (PSERS) has released its FY 2020 Comprehensive Annual Financial Report (CAFR) to policymakers and the public.

The 140-page CAFR, published Thursday, provides a plethora of data that reflects PSERS' dual role as a governmental component of the Commonwealth and a worldwide investor of the Fund's assets, which help provide retirement benefits to about 523,000 Pennsylvanians. The report contains financial, accounting, investment, actuarial, and statistical information in accordance with Pennsylvania law and the Government Finance Officers Association standards

The CAFR's narratives, graphs, and charts show PSERS, like the rest of the world, was not immune to the operational and financial impacts wrought by the COVID-19 pandemic. The pandemic's onset, occurring about midway through the fiscal year, caused PSERS to quickly transition its workforce to remote operations for the safety of its employees. Working remotely, PSERS continued to ensure uninterrupted management and payment of benefits and monitor volatile financial markets.

"For policymakers, citizens, and historians, the CAFR can be a valuable read for understanding how the pandemic split the world in half during the last fiscal year," said PSERS Chief Financial Officer Brian Carl who oversees the report's annual publication. "We all had about six months of relative normalcy in our personal and professional lives, and then the pandemic hit in the winter, upending health, safety, and financial wellbeing of people across the state and globe.

"As the virus and the response to it ebbs and flows, we will continue to work with policymakers for the benefit of our members and the Commonwealth," Carl added. "Despite these challenges, we must remain positive, and that is why we designed the CAFR with photographs depicting the wonders of Pennsylvania's state parks and urban landscapes."

CAFR highlights for the 2019-20 fiscal year include:

  • PSERS distributed nearly 94% of its $6.9 billion in total benefit payments to retirees residing in Pennsylvania's 67 counties. Those payments helped bolster local and state economies whenever retirees shopped in state or online.
  • Nearly three quarters of retirees (174,000) received annual benefits totaling less than $40,000.
  • Gov. Tom Wolf and the General Assembly worked together to provide PSERS with the full actuarially required employer contribution ($4.8 billion) for the 2019-20 school year.  Four consecutive years of receiving the full actuarial funding is making a positive impact on PSERS financial health.
  • The System's funded ratio on a market-value basis was 54.3% at June 30, 2020. A slight decrease in the FY 2020 funded ratio on a market-value basis was expected based on the negative impact of the ongoing COVID-19 pandemic on investment markets during FY 2020.
  • PSERS net- of- fee return was 1.11% for FY2020; 6.68% for FY 2019; 9.27% for FY 2018; and 7.70% for the 10-year period ended June 30, 2020. The System's assumed rate of return is 7.25%.
  • PSERS total net position decreased by approximately $100 million to $59 billion between FY19 and FY20. The decrease was caused mostly by benefit payments and administrative expenses exceeding investment gains, and employee and employer contributions.

 
The entire report can be downloaded from the Financial Publications page of PSERS website: https://www.psers.pa.gov/FPP/Publications/General/Pages/CAFR.aspx

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, 240,000 retired school employees and 26,000 vested inactive members.