Penn SERS Returns 12.2% in 2023 | Chief Investment Officer

The Pennsylvania State Employees’ Retirement System’s defined benefit plan returned 12.2% in 2023 and 6.78% in the year’s fourth quarter, the fund’s investment committee announced during its March 5 board meeting.

PSERS’ returns were boosted by equities, with domestic equities returning 25.56% for the calendar year, international developed-market equities returning 18.99%, and emerging markets equity returning 11.40%.

Other strong performers included legacy private credit, which returned 10.85%. Most other asset classes produced single-digit returns, including fixed income (5.57%), Treasury inflation-protected securities (3.85%), cash (5.14%) and private equity (6.59%).

Real estate was the worst performer for the fund, returning negative 11.91%. The real estate portfolio, which represents 7% of total assets, is divided between core/core plus investments (1.75%), value add and opportunistic strategies (4.9%) and real estate securities (0.35%), according to the fund’s investment policy statement.

The fund’s board also moved to increase its allocation to U.S. equity by 3%, while decreasing fixed income by 3%. The fund now allocates 34% and 19% to these asset classes, respectively.

Penn SERS served more than 243,000 beneficiaries and had $36.4 billion in assets under management under its defined benefit plan, as of December 31, 2023.