The Pennsylvania State Employees’ Retirement System’s defined benefit plan returned 12.2% in 2023 and 6.78% in the year’s fourth quarter, the fund’s investment committee announced during its March 5 board meeting.
PSERS’ returns were boosted by equities, with domestic equities returning 25.56% for the calendar year, international developed-market equities returning 18.99%, and emerging markets equity returning 11.40%.
Other strong performers included legacy private credit, which returned 10.85%. Most other asset classes produced single-digit returns, including fixed income (5.57%), Treasury inflation-protected securities (3.85%), cash (5.14%) and private equity (6.59%).
Real estate was the worst performer for the fund, returning negative 11.91%. The real estate portfolio, which represents 7% of total assets, is divided between core/core plus investments (1.75%), value add and opportunistic strategies (4.9%) and real estate securities (0.35%), according to the fund’s investment policy statement.
The fund’s board also moved to increase its allocation to U.S. equity by 3%, while decreasing fixed income by 3%. The fund now allocates 34% and 19% to these asset classes, respectively.
Penn SERS served more than 243,000 beneficiaries and had $36.4 billion in assets under management under its defined benefit plan, as of December 31, 2023.
Related Stories:
Pennsylvania SERS Commits $220M to Private Equity, Real Estate
Pennsylvania PSERS Reports Preliminary 3.54% Return for 2023
Pennsylvania PSERS Drops Aon as Consultant
Tags: Penn SERS, Pennsylvania State Employees Retirement System, Pensions