NHRS Realizes 29.4% Investment Return in FY 2021

Trust fund assets stood at $11.573 billion as of June 30, 2021

Oct 25, 2021
  • Investments

For Immediate Release: October 25, 2021
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 29.4% return on investments in the fiscal year ended June 30, 2021. 

The three-year, five-year, 10-year, 20-year, and 25-year returns for the periods ended June 30, 2021, were 11.4%, 11.3%, 9.3%, 7.2%, and 7.9%, respectively.  All returns are net of fees. The retirement system’s assumed rate of investment return is 6.75%.

Compared to the members in the Callan Public Fund Sponsor – Large Universe (greater than $1 billion), which contains 106 public plans with $1.7 trillion assets under management (AUM), NHRS performed better than 80% of its peers over the one- and 10-year periods.

The 29.4% return exceeded the total fund benchmark of 24.3%. The top-performing asset classes were domestic equity (46.8% return), which makes up 31.0% of the portfolio, and alternative investments (39.4% return), which makes up 19.3% of the portfolio.

“Despite a still-fragile economy, the retirement system was able to achieve its best rate of return in more than 30 years,” said NHRS Executive Director Jan Goodwin. “While this is very good news, as long-term investors we know that we will see returns above and below our assumed rate of return in any given year.”

At the close of the fiscal year, the retirement system’s unaudited net position held in trust was $11.573 billion, an increase of $2.44 billion over the prior fiscal year, which stood at $9.134 billion. This is the first time NHRS assets have exceeded $11 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 $7 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. FY 2021 investment performance was impacted positively by diversification away from the S&P stock index and a tilt to small capitalization equities. 

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 2021 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 39,500 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.