July 28, 2014

Maryland pension fund earns 14%, now valued at $45 billion

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Wall Street stock exchange (by zonnabar, flickr)

Photo above: Wall Street stock exchange (By zoonabar, Flickr Creative Commons License)

Maryland’s pension system for state employees and teachers had another strong investment performance for the fiscal year which ended June 30 earning 14.37%, bringing the value of the portfolio to $45.4 billion, a gain of more than $5 billion.

It was the second year in a row of strong performance due to sharp upturns in stocks, according to Chief Investment Officer Melissa Moye. The fund exceeded its target of 7.7% and its market benchmark of 14.16% — what its basket of assets would have been expected to earn.

The figures were released last Friday. Unlike last year’s report they do not include investment performance by asset category, and it did not list the dollar amount or percentage of unfunded liabilities for the system which covers 244,000 active and retired state employees and teachers and their beneficiaries.

The unfunded liabilities of the pension system — the amount it has promised to pay out in the future minus its current assets — have been about $20 billion. These liabilities are consistently mentioned as a negative financial factor by all three bond rating agencies as they did earlier this month.

But the three New York agencies also note the improvements made in Maryland’s pension outlook after employee contributions were raised and benefits reduced by the legislature in 2011.

“The funds annual returns continue to reflect the strong market environment that has prevailed since the end of the credit crisis,” State Treasurer Nancy Kopp, chair of the pension board, said in a statement.

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Source: Maryland State Retirement and Pension System Comprehensive Annual Financial Report with 2014 bar graph added

  • abby_adams

    Just a question, what effect will the shifting of teachers pensions to the counties have on the overall pension shortage? Are any of those $$ figured into the $20B?

    • lenlazarick

      It all goes into the same pot. The amount from the counties simply reduces what the state government must put in each year.