Kentucky Employees Retirement System Reports Double-Digit Gains

The state’s main pension funds’ returns ranged from 12.5% to 13.81%.

The $16 billion Kentucky Retirement Systems (KRS) reported double-digit investment returns for all pension and insurance funds under management for the fiscal year that ended June 30.

The KRS’ Employees Retirement System’s (KERS) Non-Hazardous Pension Fund returned 13.47%, and the County Employees Retirement System (CERS) Non-Hazardous Pension Fund returned 13.81%. The KERS Hazardous Pension Fund and the CERS Hazardous Pension fund gained 13.44% and 13.73%, respectively, while the State Police Retirement System (SPRS) returned 12.50%.

“The excellent investment returns reflect not only the attractive market conditions, but also the work done by our new investment committee, and the interim CIO and his staff,” said David Eager, interim executive director, in a statement.  “Throughout the year, they have been adjusting our portfolios to better reflect the needs of each fund, to reduce management fees, and increase the risk-adjusted returns. The results bear out the success they have had.”

KRS said preliminary estimates indicate that the positive growth translates into a gain of almost $95 million in the value of the KERS Non-Hazardous Pension Fund, over $589 million for the CERS Non-Hazardous Pension Fund, and approximately $36 million for the State Police Pension Fund.

The system’s insurance funds also reported double-digit growth for the fiscal year.  The KERS Non-Hazardous Insurance Fund returned 13.78%, while the KERS Hazardous Insurance Fund reported a gain of 13.76%; CERS Non-Hazardous and Hazardous posted returns of 13.67% and 13.70% respectively, while The State Police Retirement System finished the fiscal year with a 13.70% gain.

“It’s very gratifying for the investment team to see that all of our efforts, and the efforts of the Investment Committee, over the last year have produced positive results,” said KRS Interim Executive Director of Investments Rich Robben. “I am particularly proud that all of our plans will end the year with more assets than they started with at the beginning of the year.”

The KRS also reported its monthly performance update for June. The KERS Non-Hazardous Pension Fund returned 0.53% for the month, and 3.17% for the quarter ending June 30, while the CERS Non-Hazardous Pension Fund, and CERS Hazardous plan returned 0.70% and 0.77%, respectively, for the month, and 3.26% and 3.29%, respectively, over the quarter. The SPRS Plan gained 0.77% for June, and 3.33% for the quarter.

“The second quarter was marked with the continued strong performance of risk assets across the globe,” said KRS in a statement. “Economic data seemed to underpin the movement with relatively strong earnings and top-line growth at the corporate level, job growth leading to lower unemployment figures, and muted inflation.”

The KRS added that “the quarter also provided active investors hope for outperformance as dispersion among market factors emerged, which has not been the case in prior quarters with higher correlations.”

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