Kentucky Teachers’ Pension Gains 15.37%

The $19 billion Teachers’ Retirement System of the State of Kentucky (TRS) reported a 15.37% return for the fiscal year that ended June 30, which was more than double its 7.5% assumed rate of return, and reversed its -1.01 % gross returns from the previous year.

TRS said its assets for all its funds, which also include medical insurance and life insurance funds, exceeded $19 billion for the first time. It also said that the pension benefitted from the first installments of more than $900 million in additional funding approved by the state’s General Assembly and Gov. Matt Bevin, which it says was the first such appropriation in nine years.

“The additional funding provided by the governor and legislators couldn’t have come at a better time,” said TRS Executive Secretary Gary Harbin. “The investing team for teachers is to be credited with putting that additional funding to its best use. The rankings can give current and retired teachers comfort that their investment team is among the very best in the country whether the markets are up or down. TRS’s long-term investment strategy works.”

TRS’ investments have returned 6.3% over the past three years; 10.1% over the past five years; 6.3% over the last 10 years, and 8.1% over the last 30 years. TRS cited an analysis by Aon Hewitt Investment Consulting that placed the system’s 2017 returns among the top 8% of pension plans with more than $1 billion in assets, and its 10-year return among the top 9%.

As of March 31, the TRS’ asset allocation was 62.8% in domestic and international equities; 15.9% in fixed income; 7.8% in “additional categories;” 5.7% in alternative investments; 5.5% in real estate; and 2.3% in cash equivalents.

TRS is the largest financial institution in Kentucky, with more than 140,000 teachers and other education professionals as members. The teachers’ fund pays about $2.3 billion a year in retirement and health care benefits to its members, 89% of whom live in Kentucky.