Equity Gains Buoy Ohio School Employees’ 7.4% Return in Fiscal 2023

The School Employees Retirement System of Ohio topped its benchmark and raised its asset value to $17.8 billion.




Double-digit equities gains were the main driver behind the School Employees Retirement System of Ohio’s 7.39% investment return for the fiscal year that ended June 30, beating its benchmark by 30 basis points and raising its asset value to more than $17.8 billion. 

Global equities were the top-performing asset class for the fiscal year, returning 15.6%, followed by global private credit, which returned 6.07%. However, both underperformed their benchmarks, by 93 and 217 bps, respectively.

The pension fund’s outperformance was mainly driven by its global private equity portfolio, which returned 2.54% and topped its benchmark—which lost more than 4%—by more than 650 bps. Global real assets were the next top outperformer for Ohio SERS, beating its benchmark by nearly 300 bps with a 1.30% return versus a 1.63% loss.

The fixed-income portfolio also contributed to the retirement system’s excess return with a 0.74% gain, compared with a 0.94% loss for its benchmark Bloomberg U.S. Aggregate Bond Index. Ohio SERS’ “opportunistic and tactical” portfolio was the only other significant contributor to its outperformance, as its 2.71% return topped its benchmark’s return of 1.06%.

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Additionally, the retirement system’s board of trustees unanimously approved at its September meeting a 2.5% cost-of-living adjustment increase for eligible benefit recipients in 2024. By law, the pension fund bases its COLA on the year-to-year change in the consumer price index from June 2022 to June 2023 for urban wage earners (CPI-W) with a floor of 0% and a cap of 2.5%.

According to SERS’ actuary, the CPI-W for the fiscal year was 2.3%. The board approved the statutory maximum of 2.5%, as its actuary projected the higher COLA amount will not materially impair the pension fund’s funded status.

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