Coronavirus Impact on PSRS/PEERS
Concern continues to grow across the nation about the spread of the novel coronavirus and the impact it is having on the financial markets and personal safety. PSRS/PEERS wants to emphasize to all our members that your retirement benefits remain secure.
Impact on Investment Portfolio
Global stock markets declined significantly in the last weeks of February due to fears over the coronavirus. It is possible that markets could drop further as the ultimate impact of the virus is measured.
The PSRS/PEERS’ investment portfolio also declined in February with the stock market correction. However, it is important to note that the Systems’ portfolio is well diversified among several asset classes and structured to weather stock market volatility. Diversification is working in this latest sell-off. Emerging market stocks are not down nearly as much as the U.S. stocks, real estate is benefiting from falling interest rates, and bonds and cash are benefiting from being safe-haven assets.
As the latest crisis continues to unfold, we are mindful of the day-to-day volatility within the markets and are in communication with various market participants to evaluate potential developments. We continue to believe that until there is more clarity, there will be difficult times ahead. However, our overall primary mission and focus remains investing the Systems’ assets in a manner to earn the 7.5% actuarial assumed rate of return over a long-term horizon. We will continue to look for opportunities to rebalance back into stocks, as well as deploy assets in other attractive investments.
We want to emphasize to all our members that your PSRS/PEERS benefits are secure. PSRS/PEERS is a long-term investor and has the ability to withstand market volatility. The Board and professional staff are committed to managing the Systems’ assets in a prudent manner that will ensure the viability of your pension.