PSERS Board Announces Investment Actions and Results

HARRISBURG, PA – The Board of Trustees of the Pennsylvania Public School Employees’ Retirement System (PSERS) voted today to make new investment commitments totaling as much as $1 billion.

 

The investments, which were approved in two separate votes, concern investment commitments of $500 million to a core fixed income fund, Garcia Hamilton & Associates LP, and $500 million to a core fixed income fund, JP Morgan Asset Management LP.

 

In other business, the board adopted separate resolutions authorizing the disposition of real estate assets held by PSERS via two holding companies: Keystone-Florida Holding Corp. and Commonwealth Holdings, Inc. Additionally, the investment Committee reviewed a net investment performance report for the quarter ended Sept. 30, 2023. The net results were: -2.22% for the quarter; 6.02% for 1-year; 7.41% for 3 years; 6.56% for 5 years; and 6.92% for 10 years.

 

“While the near-term results were to be expected given the drawback in equities markets and rise in interest rates over the period, PSERS performance over the third quarter outpaced internal benchmarks of -2.71% and were not materially dissimilar from median peer performance of -1.63% for the period,” said PSERS Chief Investment Officer Ben Cotton.

 

“PSERS expects to release final Q4 2023 performance prior to the May Investment Committee/Board meeting and after the performance verification process is completed,” Cotton continued. “Preliminary Q4 performance data shows a positive trend based on public market proxies and reported private market returns, resulting in preliminary estimated returns of approximately 6% for the total plan for Q4 and just over 8% for the full 2023 calendar year.”

 

The Investment Committee also reviewed a total investment cost report from CEM Benchmarking, an independent consulting firm.  The full report covering the 2022 calendar year will be posted online at psers.pa.gov and notably observes that Defined Benefit (DB) investment costs were low in comparison to PSERS’ peer group. Costs decreased from 100.6 BPS in 2018 to 60.9 BPS in 2022. ​

 

 

PSERS, founded in 1917, began operations in 1919 to oversee a statewide defined benefit pension plan for public school employees. PSERS' role expanded upon the passage of Act 5 of 2017 to include oversight of two new benefit options consisting of defined benefit and defined contribution (DC) components and a stand-alone DC plan. As of Dec. 31, 2023, PSERS had total net assets of $74.5 billion and a membership of about 251,000 active, 250,000 retired school employees and 27,000 vested inactive members.

 

##​#