The TEXPERS Blog

Texas Public Pension Funds Ride 2017 Stock Market to 11 percent returns

By Joe Gimenez, TEXPERS' Public Relations Consultant

The U.S. stock market’s stellar performance helped Texas’ public employee pension funds average 11 percent returns in 2017, according to a survey performed by Maples Fund Services for the Texas Association of Public Employee Retirement Systems. The 63 systems responding beat the average target rate of 7.5 percent in both the one-year and 15-year periods.

“The pension systems for municipal employees, firefighters, and police officers are doing their job, lowering risk and raising returns with money entrusted to them by their cities for the deferred retirement benefits of their employees,” said Max Patterson, executive director for TEXPERS. “This continuing excellent performance is surely one of the reasons public employees demonstrated such dedication to duty during Hurricane Harvey, flocking to those areas hardest hit and mobilizing to aid distressed Texans.”

James Perry of Maples Financial Services provides an overview of TEXPERS' annual asset allocation report.

TEXPERS’ yearly “Report on the Asset Allocation and Investment Performance of Texas Public Employee Retirement Systems," released in April, shows that local systems made few changes to their asset allocations from 2016. Stocks comprise 48.7 percent of their holdings, with alternative strategies and fixed income accounting for the rest. The 63 survey respondents manage $57.10 billion in combined total assets.

The local pension funds continued lowering the rate they target for investment returns. The average rate was 7.5 percent, down from 7.6 percent in 2016, and 8.0 percent in 2013. Lowering the target rate reduces portfolio risk but also requires larger contributions from plan sponsors.

TEXPERS released the report to 560 pension Trustees, administrators, system members and investment professionals attending its "Casting the Net for Retirement Security” educational conference on South Padre Island April 15-18.

Patterson recognized the following standout systems for 20-year average performance for the period ending September 2017:

Big Spring Firemen's Relief & Retirement Fund		7.74%
Austin Firefighters’ Relief & Retirement Fund		7.20%

The full 2018 Asset Allocation report is available here.

About the Author:

Joe Gimenez is TEXPERS's public relations consultant. He owns G3 Public Relations, a public and media relations firm that also specializes in reputation management.