Total Fund Investment Returns
As of September 30, 2016
The Board has established a long-term objective to achieve a total investment return of at least 7.75% per year and a real rate of return of at least 5.5% per year. The real rate of return is the rate by which the long-term total return exceeds the inflation rate. The Systems' long-term investment objective of 7.75% was lowered from 8.0 percent at the Board of Trustees meeting in June 2016 as a result of a recently conducted asset liability study.
The Systems' earned an investment return of 8.8% for the one year period ended September 30, 2016. The total plan return fell short of the policy benchmark of 10.0% but exceeded the long-term investment objective of 7.75% as a result of the recent rebound in global equity markets.
The Systems' annualized return for the 5- and 7-year time period exceeds the long-term investment objective while the 10-year timeframe is less than the long-term objective reflecting the lingering effects of the credit crisis and extreme market volatility beginning in 2008. However, over long periods of time, PSRS and PEERS continue to produce investment returns that meet or exceed the Systems' objective. The annualized investment return over the last 30 years is 8.4%.
- *Effective July 1, 2013 all assets are held in the Missouri Education Pension Trust (MEPT) for the exclusive benefit of the Public School and Education Employee Retirement Systems of Missouri.
- **The Policy Benchmark is comprised of 39.0% Russell 3000 Index, 16.5% MSCI ACWI ex-USA Index, 14.4% Barclays U.S. Treasury: Intermediate Index, 15.0% Barclays U.S. Intermediate Credit Index, 7.5% NCREIF Open End Diversified Core Equity Index, 4.0% Barclays U.S. TIPS 1-10 Year Index, 2.0% Merrill Lynch High Yield Master II Index, and 1.6% Barclays U.S. Treasury: Long Index.
*** The Retirement Systems' 2017 Fiscal Year began on July 1, 2016.