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PSERS' Asset Allocation Outperforms Peers While Maintaining Lower Risk Profile

06/17/2022

For More Information Contact:

Evelyn Williams
Communications Director
Public School Employees' Retirement System
Phone: 717-720-4734
e-mail:  evwilliams@pa.gov
 

PSERS' ASSET ALLOCATION OUTPERFORMS PEERS WHILE MAINTAINING LOWER RISK PROFILE
The Fund posts positive preliminary return of 1.14% for the quarter ended and 8.60% for the fiscal year-to-date ended March 31, 2022

HARRISBURG, PA – The Pennsylvania Public School Employees' Retirement System (PSERS) announced today it generated top-tier net investment returns and protected assets while navigating surging inflation and interest rates, and economic disruptions caused by the pandemic and Russia's war in Ukraine.

PSERS preliminary net investment return for the quarter ended March 31, 2022, was first among the 65-fund public plan peer group of all plans greater than $1 billion tracked by the Board of Trustees' investment consulting firm, Aon.  PSERS preliminary net returns also carried one of the lowest investment risk profiles among pension plans tracked by Aon which further protected assets.

The preliminary net investment returns that exceeded peer groups for the period ended March 31, 2022, were:

  • 1.14% for the quarter
  • 8.60% for the fiscal year-to-date
  • 16.59% for the calendar year

PSERS' 3-year and 5-year net return of 12.15% and 10.14%, respectively, were also in the top quartile among its peer group while the 10-year return of 8.59% came in above the median.

Aon's rankings were similar with other investment consulting firms that track public pension returns. The Milliman firm's 100 Public Pension Funding Index estimates the largest funds experienced an aggregate -3.36% net return loss for the quarter and individual plans' net returns ranging from a loss of -5.52% to 0.50%.

"The world changed in a short amount of time," PSERS Board Chairman Chris Santa Maria said after the Board's public meeting on Friday. "We are pleased our diversified portfolio is helping us better withstand these negative economic shocks that I hope will end soon."

Brian Carl, PSERS Chief Financial Officer, presented the Fund's financial statements for the quarter ended March 31, 2022.  PSERS total net asset value as of March 31, 2022, was another record high for the Fund at $75.9 billion in assets. The timing of these investment gains could help the System's overall financial health as PSERS' fiscal year winds down on June 30, 2022.

"Market conditions are some of the most dynamic and complicated I've seen in my public finance career," said Interim Chief Investment Officer Bob Devine. "Still, investment opportunities can be found. Our talented PSERS investment team is poised to follow the Board's direction to pursue market opportunities and prudently act for the benefit of our members."

"I am pleased with the Fund's quarterly results and thankful for the hard work of both the Board and staff,' Mr. Devine said.  "We are focusing our attention to current market conditions to ensure the continuation of prospective returns over the long-term."

The Board also approved two new investments, pending contract negotiations. The Board approved an amount not to exceed $100 million plus reasonable normal investment expenses to Greenoaks Capital Opportunities Fund V, L.P. The Board also approved an amount not to exceed $250 million plus reasonable normal investment expenses to GCM US Partnership Opportunities, L.P. SMA.

In other PSERS news, the Board continued to make progress on governance reforms. Revisions to charters were adopted by the Board for all the Board Committees.  Position descriptions were developed and adopted for the following positions: Board Member, Board Chairperson and Vice Chairperson, and Committee Chair and Committee Vice Chair.

Please see separate press release announcing PSERS new Executive Director.

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 benefit options consisting of defined benefit and defined contribution (DC) components and a stand-alone DC plan. As of March 31, 2022, PSERS had total net assets of $75.9 billion and a membership of about 248,000 active, 243,000 retired school employees and 26,000 vested inactive members.

 

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