While the unfunded liabilities of the commonwealth's public-sector pension systems continue to rise, investment performance remains fairly strong.
The Public School Employees’ Retirement System this week reported a 3.61 percent return for its third quarter, which ended March 31. That added $1.7 billion to the fund.
“This shows that the system is currently on track to meet its annual investment earnings assumption of 7.5 percent for the current fiscal year,” said Evelyn Tatkovski Williams, a PSERS spokeswoman. “Our fiscal year ends June 30 and if the investment markets remain positive (until) then we may have another positive fiscal year to report.”
However, meeting and exceeding earnings assumptions, which will help with the unfunded liability, will not solve the underfunding issue, she said.
“We cannot earn our way out of the funding issue,” she said.
PSERS has an unfunded liability of $32.6 billion, as of June 30, 2013. That was up from $29.5 billion the previous fiscal year.
The system’s annualized 25- and 30-year returns through March 31 were 8.79 percent and 9.52 percent, respectively. Its fiscal year-to-date performance is 10.25 percent. XXCQXX
PSERS is the 19th-largest state-sponsored defined-benefit pension fund in the country. It has net assets of $51.4 billion and a membership of more than 267,000 active school employees and more than 209,000 retirees.
Meanwhile, the State Employees’ Retirement System, or SERS, posted a net-of-fees return of 2.7 percent for the first quarter. That added about $726 million to the fund.
SERS has an unfunded liability of $17.9 billion, as of the close of 2013.
With all eyes on the 2014-15 state budget, pension reform is at the top of the priority list for many Republicans, including Gov. Tom Corbett.