Kentucky Pension System Returns 10.7% in Fiscal 2024

The Kentucky Public Pensions Authority, the organization that manages several public pension funds in the state, announced that the system’s pension assets returned 10.7% in fiscal 2024, which ended June 30.

Assets of the pension system, comprised of the County Employees Retirement System, Kentucky Employees Retirement System and the State Police Retirement System, each with a pension fund and an insurance trust fund, rose to $26.9 billion from $23.9 billion through June 2023. CERS and KERS both have separate hazardous and nonhazardous membership.

The CERS hazardous and nonhazardous pension and insurance funds returned 11.7% in the fiscal year, while the Kentucky Retirement System, comprised of both KERS and SPRS, returned 10.6%.

Each fund outperformed its actuarial assumed rate of return, which was 6.5% for CERS, KERS and SPRS insurance trust, 6.25% for the KERS hazardous portfolio and 5.25% for both the KERS nonhazardous and SPRS fund.

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“Our disciplined investment strategy and focus on diversification continue to produce strong risk adjusted performance for the systems and participants,” said Steve Willer, CIO of the KPPA, in a statement.

The KPPA manages pensions for 433,000 beneficiaries, comprised of active and retired educators, state and local government employees, state police officers and other nonteaching staff of local school boards and universities.

As of the end of July, the KERS nonhazardous pension plan had $4.3 billion in assets under management, while the KERS hazardous and SPRS plans had $1.04 billion and $665 million in assets, respectively. These funds had insurance plan assets of $1.711 billion, $676 million and $275 million, respectively.

The CERS nonhazardous pension plan had $9.79 billion in assets as of the end of July, and the hazardous plan had $3.468 billion in assets. The two systems’ insurance plans had assets of $3.631 billion and $1.748 billion, respectively. In total, CERS manages $18.3 billion, as of June 30.

At the end of July, CERS had allocated 50.8% of its portfolio to global equities, 19.7% to specialty credit, 12.1% to core fixed income, 6.4% to private equity, 5.2% to real estate, 4.1% to real return assets and 1.8% to cash.

KERS had a 31.8% allocation to equities and a 27.2% allocation to core fixed income. The fund also allocated 19.4% to specialty credit, 8.5% to real return assets, 5.1% to real estate, 4.6% to private equity and 3.4% to cash.