AUSTIN, Texas, July 20, 2021 /PRNewswire/ -- The pension systems for Texas cities' firefighters, police and municipal employees scored gains in 2020 despite the peak-to-trough stock market decline of more than 35% during March and April 2020 in response to the Covid-19 pandemic.
Despite that significant recent decline, the 42 system members of the Texas Association of Public Employee Retirement Systems' responding to an annual survey hit the average actuarial targets of 7.4% in annualized returns for the five-year period. Their combined portfolios amounted to $54.98 billion at the close of the survey period. The median target rate of the 100 pension systems monitored by the Pension Review Board of Texas is 7.25%.
The survey, conducted for TEXPERS by the Maples Group, confirmed also that the local pension systems who provide secure retirement for public servants successfully diversified their portfolio assets to smooth over market roller coaster rides of the last 20 years. The systems have outperformed the 5.2% average of an industry standard global aggregate index of 60 percent stocks and 40 percent bonds and overcome three significant bear market events with some of the largest drawdowns of equity markets since the Great Depression.
"Pensions must succeed over the long term in matching overall performance to the decades-long careers of public employees," said James Smith, the president of TEXPERS' Board of Directors. "The pension systems must deliver on the promises of city employers for the deferred benefits of retirement security. This survey, perhaps more than any other, reflects on pension Trustees' proficiencies."
TEXPERS released its yearly "Report on the Asset Allocation and Investment Performance of Texas Public Employee Retirement Systems" at its Annual Conference May 23-26. Approximately 450 people registered and attended the event at the Austin Marriott.
NOTE TO EDITORS: The global aggregate index referenced in the third paragraph is the 60% Morgan Stanley Capital International All Country World (Equity) Index and the 40% Bloomberg Barclays U.S. Aggregate Bond Index.
The Texas Association of Public Employee Retirement Systems is a voluntary nonprofit association that provides education and legislative advisory services to the trustees, administrators, professional service providers, and employee groups that manage the retirement money of police officers, firefighters, and municipal and district employees in cities across Texas. TEXPERS' 68 member pension systems $32.7 billion in retirement assets for 57,728 active members and 60,737 retirees and beneficiary annuitants.