PSRS/PEERS Generates $5.5 Billion of Investment Earnings During Fiscal Year 2014September 16, 2014
The Public School and Education Employee Retirement Systems of Missouri's (PSRS/PEERS) strong investment program, paired with substantial returns in the global stock market, added approximately $5.5 billion in investment earnings to the growth of assets for fiscal year 2014.
These significant investment earnings are a result of the Systems' achievement of a 16.9% investment return, exceeding both the long-term investment goal (actuarially assumed return) of earning 8% and the total plan policy benchmark* return of 15.5%. Over long periods of time, PSRS/PEERS also continue to produce investment returns that meet or exceed the Systems' objectives. The annualized investment return for PSRS/PEERS over the last 30 years is 9.9%.
|PSRS/PEERS Investment Return||16.9%|
|PSRS/PEERS Return Goal||8.0%|
For fiscal year 2014, PSRS/PEERS internal investment staff and external investment managers added over $415 million in value above the policy benchmark, net of all fees and expenses.
"Our long-term goal is to provide consistent and meaningful investment returns to support the retirement benefits of our members," said Steve Yoakum, PSRS/PEERS executive director. "Our internal investment staff is committed to managing the Systems' assets in a prudent manner that will ensure the viability of the pension for each Missouri educator. For the second consecutive year, we added significant value above our investment benchmark, which helps maintain consistent contribution rates for all of our members and employers."
"Growing our net assets is essential to maintaining the stability of the Systems, as well as our strong pre-funded status," said PSRS/PEERS Chief Investment Officer Craig Husting. "We are very pleased that we have been able to make such a substantial contribution to the Systems' net assets this past fiscal year, and we are working to provide continued growth into the future."
Investment earnings account for the majority of the assets needed to fund and pay retirement benefits. On average, 63 cents of every dollar paid to PSRS/PEERS retirees come from investment earnings.
The overall market value of PSRS/PEERS invested assets, which takes into account the amount paid in benefits, increased by almost $4.5 billion from the previous year.
The market value of invested assets for PSRS/PEERS combined were approximately $37.9 billion on June 30, 2014, making the joint entity larger than all other public retirement plans in Missouri combined, and the 44th largest defined benefit pension plan in the United States.
*The plan policy benchmark is a standard to measure investment performance and indicates the return of the PSRS/PEERS target asset allocation if passive market rates of return were achieved.