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Texas Public Pension Funds Return 11% in 2017

However, survey of 63 funds finds pensions performing below their 20-year target.

By Michael Katz

Texas’ public employee pension funds returned an average of 11% in 2017, as they rode the strong gains of US equities last year, according to a survey by Maples Fund Services for the Texas Association of Public Employee Retirement Systems (TEXPERS).

The report from Maples reviewed the asset allocation and investment performance for 63 local pension systems that are members of TEXPERS, which have a combined market value of approximately $57.1 billion. It found that the 63 funds’ average annualized returns for one, three, five, 10, 15, and 20 years were 11.0%, 5.5%, 7.4%, 4.9%, 7.7%, and 6.6% respectively. Overall, the Texas public retirement system has 75 member systems, with approximately 2 million participants, and $165 billion in assets.

“The pension systems for municipal employees, firefighters, and police officers are doing their job, lowering risk and raising returns,” Max Patterson, executive director for TEXPERS, said in a release.

The local pension funds average target rate for investment returns has been edging lower in recent years, falling to 7.5% in 2017, from 7.6% in 2016, and 8.0% in 2013. While lowering the target rate reduces portfolio risk, it also requires larger contributions from plan sponsors.

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The survey found that the average dollar-weighted asset allocation of the funds was 27.3% in alternative strategies, 26.9% in domestic equities, 22.2% in fixed income, 21.6% in international equities, and 2% in short-term securities/cash/other. Alternative Strategies include private equity, real estate, venture capital, marketable alternative strategies, and commodities.

For the trailing 15-year period, the survey respondents’ 7.7% return underperformed the Wilshire Median Public Fund’s 8.4% return for the same period, while for the trailing 10-year period, the funds’ 4.9% average return underperformed the benchmark’s 5.6% return for the same period.

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Home > News > Regulation > Danish Pension Group Proposes 56 ‘Concrete’ Initiatives to Ease Financial Regulations
Regulation

Danish Pension Group Proposes 56 ‘Concrete’ Initiatives to Ease Financial Regulations

Committee is curious about more opportunities in digital regulation.

By Chris Butera

The  CEO of the Danish pension industry group is backing proposals to relax financial regulations as part of a government-wide overhaul.

“Since the financial crisis, we have seen a massive amount of regulation in the insurance and pension industry,” said Per Bremer Rasmussen, CEO of Insurance & Pension Denmark, who added that said regulations have been an “extensive and costly” process which has allowed his group to make some suggestions on how to simplify them..

Rasmussen’s team is recommending the implementation of 56 “concrete” initiatives. Key areas the proposals center on are direct European regulation and the Danish implementation of European regulation. Other concerns are proposals regarding national special rules and the supervision of the Danish Financial Supervisory Authority, the financial regulatory power of Denmark’s financial markets.

Under these proposals, the group determined that businesses could save up to DKK300 million ($48.6 million) per year, even though there are still some proposals with unmeasured savings.  

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The committee said it has also looked at more digital approaches toward regulation and how society and financial companies can benefit.

“I am particularly pleased that it is possible to use digital solutions in greater detail and focus more on providing insurance products that meet consumer expectations for digital insurance products,” Rasmussen said in a statement.

Insurance & Pension Denmark’s findings will be included in an upcoming revision and modernization of the country’s Financial Business Act, the group said.

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