NHRS Realizes 8.9% Investment Return in Fiscal Year 2018

Trust fund assets stand at $8.87 billion as of June 30, 2018

Oct 11, 2018
  • Investments

For Immediate Release: October 11, 2018
Contact: Marty Karlon, Public Information Officer, (603) 410-3594; [email protected]

CONCORD, NH – The New Hampshire Retirement System (NHRS, the retirement system) realized an 8.9% return on investments in the fiscal year ended June 30, 2018, outperforming the Total Fund benchmark return of 7.8% and the retirement system’s assumed rate of investment return of 7.25%. 

The three-year, five-year, 10-year, 20-year, and 25-year returns for the periods ended June 30, 2018, were 7.7%, 8.7%, 7.1%, 6.4%, and 8.0%, respectively. 

Compared to the members in the InvestorForce Public Defined Benefit Net Universe, which consists of 237 public pension plans totaling $464 billion in assets, NHRS performed better than 90% of its peers over the three- and five-year periods and better than 80% of its peers over the one-, ten-, 20-, and 25-year periods. All returns are net of fees.

“Our investment return was driven largely by continued momentum in domestic equity markets and traction gained in our private equity and private debt portfolio,” said NHRS Executive Director George Lagos. “While we are pleased with this return, as long-term investors, we know that we will see returns above and below our assumed rate of return in any given year. We continue to emphasize that our primary focus is to meet or exceed the retirement system’s assumed rate of return of 7.25% over the long term.”

At the close of the fiscal year, the retirement system’s unaudited net position held in trust was $8.87 billion, an increase of $581 million over the prior fiscal year, which stood at $8.29 billion. In the nine years since June 30, 2009 – the depths of the great financial crisis – NHRS trust fund assets have nearly doubled, despite paying out almost $6 billion in benefits over that same period. Eighty percent of benefit recipients continue to reside in New Hampshire, which means the bulk of pension payments remain in-state, helping support the local economy.

NHRS pursues a long-term investment strategy designed to meet its funding requirements. The Board of Trustees, with research and input from NHRS investment staff, outside experts, and a recommendation from the Independent Investment Committee (IIC), set an investment policy that includes asset allocation targets and ranges. 

The five-member IIC continuously monitors and evaluates performance on a monthly basis, and makes determinations regarding the hiring and retention of fund managers.

“The creation of the IIC in 2009, requiring that all members have substantial experience in institutional investment or finance, has yielded significant financial benefit for the pension trust. Over the past nine years, working together with Larry Johansen, our Director of Investments, and NEPC, our external consultants, the IIC has measurably and substantially improved investment performance as compared to the previous structure and approach to managing the portfolio,” said Lagos.

Further information on the retirement system’s investment performance is available online at:
https://www.nhrs.org/funding-and-investments/investments

Detailed fiscal year 2018 financial and investment information will be included in the retirement system’s Comprehensive Annual Financial Report (CAFR) and Comprehensive Annual Investment Report (CAIR), both due out in December.

About NHRS

NHRS provides retirement, disability, and death benefits to its eligible members and their beneficiaries.  The State of New Hampshire and more than 470 local government employers participate in NHRS for their employees, teachers, firefighters, and police officers.  NHRS has approximately 48,000 active members and 35,000 pension recipients. NHRS administers a defined benefit plan qualified as a tax-exempt entity under sections 401(a) and 501(a) of the Internal Revenue Code.

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