NHRS Realizes -6.1% Investment Return in Fiscal Year 2022

Trust fund assets stood at $10.75 billion as of June 30, 2022

Nov 04, 2022
  • Investments

For Immediate Release: November 4, 2022
Contact: Marty Karlon, Director of Communications & Legislative Affairs, (603) 410-3594; public_relations@nhrs.org 

CONCORD, NH – The New Hampshire Retirement System (NHRS, the retirement system) realized a negative 6.1% return on investments in the fiscal year ended June 30, 2022.
The fiscal year 2022 return, NHRS’ first negative return since 2009, reflects the ongoing volatility of global financial markets impacted by inflation, rising interest rates, and Russia’s invasion of Ukraine.

The three-year, five-year, 10-year, and 25-year returns for the periods ended June 30, 2022, were 7.1%, 7.2%, 8.5%, and 6.9%, respectively.  All returns are net of fees. The retirement system’s assumed rate of investment return is 6.75%.

The -6.1% return exceeded the total fund benchmark of -9.3%. Compared to the members in the Callan Public Fund Sponsor – Large Universe (greater than $1 billion), which contains 111 public plans with $2.0 trillion assets under management (AUM), NHRS performed better than two-thirds of its peers in FY 2022 and was in the top 20% over the past decade. 

“As a result of several unforeseen events, global markets were severely challenged in the spring of 2022,” said NHRS Executive Director Jan Goodwin. “As long-term investors we know that we will see returns above and below our assumed rate of return in any given year. Because investment results are smoothed on a five-year rolling average, the loss this year won’t be recognized all at once, which is the same way the 29.4% return we experienced in FY 2021 was treated.”

“Like all investors, NHRS has dealt with a volatile and challenging investment landscape in recent years,” Goodwin said. “We continue to emphasize that our primary focus is to meet or exceed the retirement system’s assumed rate of return of 6.75% over the long term.”

At the close of the fiscal year, the retirement system’s unaudited net position held in trust was $10.753 billion, a decrease from the prior fiscal year, which stood at $11.573 billion. 

Since June 30, 2009 – the depths of the great financial crisis – NHRS trust fund assets have more than doubled, despite paying out more than $9 billion in benefits over that same period. Nearly 80 percent of benefit recipients continue to reside in New Hampshire, which means most of these benefit payments remain in-state, helping support the local economy.

NHRS has a diversified investment portfolio which, in any given year, can diverge from market indices. The retirement system pursues a long-term investment strategy designed to meet its funding requirements and to reduce risk and mitigate volatility. The Board of Trustees, with research and input from NHRS investment staff, outside experts, and a recommendation from the Independent Investment Committee (IIC), sets an investment policy that includes asset allocation targets and ranges.  The IIC continuously monitors and evaluates performance on a monthly basis, and makes determinations regarding the hiring and retention of fund managers. 

“The Independent Investment Committee is focused on prudently managing the risk, return, and liquidity of the portfolio in accordance with the investment policy set by the Board of Trustees,” said Goodwin.

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

Detailed fiscal year 2022 financial and investment information will be included in the retirement system’s Annual Comprehensive Financial Report (ACFR) 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 460 local government employers participate in NHRS for their employees, teachers, firefighters, and police officers.  NHRS has approximately 48,500 active members and 41,000 benefit 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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