NHRS Realizes 17.6% Return on Investments in Fiscal Year 2014

Trust fund assets increased to $7.35 billion as of June 30, 2014

Feb 23, 2015
  • Investments

For Immediate Release: September 29, 2014
Contact: Marty Karlon, Public Information Officer, (603) 410-3594; [email protected]

CONCORD, N.H. – The New Hampshire Retirement System (NHRS, the retirement system) realized a 17.6% return on investments in the fiscal year ended June 30, 2014.

“Our investment return was driven by strong performance from domestic equities. While we are obviously pleased with these returns, we continue to emphasize that our primary focus is to meet or exceed the retirement system’s assumed rate of return of 7.75% over the long term,” said NHRS Executive Director George Lagos. “Although this performance will not immediately translate into an improvement of our funded ratio due to the five-year smoothing of investment gains or losses, it is certainly positive news, especially coming on the heels of a 14.5% return in the previous fiscal year.”

The three-year, five-year, 10-year, and 20-year returns for the periods ended June 30, 2014, were 10.7%, 13.5%, 7.5%, and 8.7%, respectively. Compared to its peers in the Public Defined Benefit Net Universe, which represents 182 plans totaling more than $303 billion in assets, NHRS performed better than 85% of its peers over the one-, five- and, 10-year periods and better than 90% its peers over the three-year period. All returns are net of fees.

The investment program’s return was largely driven by the performance of U.S. equities (+24.9%), which make up a little more than 42 percent of fund assets.

At the close of the fiscal year, the retirement system’s net position held in trust was $7.41 billion, an increase of more than $900 million over the prior fiscal year, which stood at $6.4 billion.

NHRS pursues an investment strategy designed to meet its long-term 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 acceptable ranges. The five-member IIC manages investments based on the Trustees’ policies, continuously monitors and evaluates performance, and makes determinations regarding the hiring and retention of fund managers.

“The Independent Investment Committee continues to do a very effective job of prudently managing the risk, return, and liquidity of the portfolio in accordance with the investment policy set by the Board of Trustees,” said Lagos.

Further information on the retirement system’s investment performance is available here.

Detailed fiscal year 2014 information will be included in the retirement system’s comprehensive annual financial report and comprehensive annual investment report, 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 49,000 active members and 30,000 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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