Nov. 14, 2018
Contact: Ron Leix, Treasury, 517-335-2167
State of Michigan Retirement Systems Earns Nearly 12 Percent
in Fiscal Year, Outperforming Peers
LANSING, Mich. – More than 530,000 state and teacher pension participants are benefiting from state investments after recent reports noted one-year and 10-year gains larger than similarly sized state pension funds, according to the Michigan Department of Treasury.
From Sept. 30, 2017 to Sept. 30, 2018, the state Treasury Department’s Bureau of Investments reported that the State of Michigan Retirement Systems (SMRS) earned a one-year rate of return of 11.6 percent, exceeding peer public pension fund median returns of 7.7 percent. Over a 10-year period, SMRS earned a return of 8.5 percent, exceeding the peer median return of 7.6 percent.
“I am proud of our staff for making Michigan a pension fund investment leader,” State Treasurer Nick Khouri said. “The performance of our overall portfolio directly benefits state and teacher retirement plans by ensuring long-term financial stability for our retirees now and in the future. The pension fund’s performance also makes our tax dollars work harder for the people of Michigan, enabling us to save for the future, pay down debt and spend dollars on other important programs.”
Over the past decade—a time that included the Great Recession—SMRS assets gained more than $9.5 billion above the peer average investment return. Due to these gains, General Fund and School Aid Fund 2018 fiscal year annual contributions into pension fund pools are nearly $780 million less than they would have been if SMRS had earned the peer average investment return.
“Our responsible and balanced approach to investing has helped state pension participants and saved taxpayers hundreds of millions of dollars,” said Chief Investment Officer Jon Braeutigam, who oversees Treasury’s Bureau of Investments. “I want to thank our staff for their hard work to ensure teacher and state pension participants have a secure future.”
Peer pension funds are state-level public pension funds within the United States greater than $10 billion in overall pension assets. The SMRS portfolio exceeds $70 billion and consists of pension fund assets for all of Michigan public school employees, state employees, Michigan State Police and judges.
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