September 1, 2008

PSERS announces strong fiscal year-end investment performance

The Pennsylvania Public School Employees’ Retirement System (PSERS) saw strong investment return results for the fiscal year ended June 30, 2007.

The pension fund generated a total return of 22.93 percent for the fiscal year ended June 30, 2007. This marks the fourth year in a row that PSERS had exceptional investment growth and has significantly exceeded its annual actuarial rate of return assumption of 8.5 percent.

For the previous three years, PSERS earned 15.26 percent in fiscal year 2005-2006, 12.87 percent in fiscal year 2004-2005, and 19.67 percent in fiscal year 2003-2004.

Additionally, PSERS’ assets under management have grown over $10 billion from $57 billion on June 30, 2006 to over $67 billion as of June 30, 2007.

PSERS’ Chairman Melva Vogler praised the Fund’s recent outstanding investment performance stating:  “I am pleased to announce PSERS has earned 22.93 percent for the fiscal year ended June 30, 2007. This investment return is nearly triple the Fund’s assumed annual rate of return of 8.5 percent. PSERS investment staff has worked hard to earn these exceptional returns for the Fund. As a result, they have met and exceeded performance benchmarks and have made PSERS one of the top performing public pension funds in the nation.”

The current fiscal year end return places PSERS in the top 1 percent of the public pension plan database compiled by Wilshire Associates. In December 2007, PSERS’ actuaries will use this investment return to calculate the employer contribution rate for fiscal year 2008-2009.

PSERS’ investment returns have continued to dramatically decrease the projected employer contribution rate increase in fiscal year 2012-2013.  PSERS’ investment returns over the past four years have reduced the projected fiscal year 2012-2013 employer contribution rate increase by more than 50 percent, from a projected high of over 27 percent to the current projected rate of less than 12 percent.

PSERS’ investment returns of 16.94 percent for the 3-year period and 14.48 percent for the 5-year period ended June 30, 2007 also ranked in the top 1 percent of the Wilshire Associates’ public pension plan database.



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