Tuesday, August 9, 2022

PERS Investment Committee Gets the Bad News

The videos and reports of the the June meeting of the PERS Investment Comittee. are posted below* The committee meets bi-monthly and is the real nuts and bolts of PERS.  The reports don't include the bloodbath that took place in the markets in the second quarter of this year but PERS still suffered a -3.5 rate of return at the end of March, shrinking the PERS portfolio by nearly $2 billion.  Don't worry,  PERS still enjoys assets of $33 billion.  

PERS is all about the numbers so here are some numbers.  

* Rate of return at the end of March is -3.5% (gross) for FY 2022.  The fiscal year began on July 1.  The returns for the various investments are: 

Domestic equity (stocks): -1.9%

Global equity (stocks): -1.3%

Fixed income: -0.4%

International equity: -2.1% 

Real estate: 1.7%

Private equity: 4.3%

* However, investments reflected the market declines of the past spring.  The rate of return for April and May was -5.0%.  Callan stated in the report (p.213): 

 U.S. Equities (Russell 3000) fell -9.1% over the last two months since the end of the first quarter of 2022. The index is down -6.0% for the fiscal year-to-date period.

●  Broad  non-U.S.  equities  have declined -5.9% since the end of the first quarter, and are down -12.0% fiscal year-to-date.

●  As the Fed continues to tighten monetary conditions and rates have risen  throughout  the  year, fixed income  markets  have  delivered negative total returns to investors (both in the U.S. and aboard).

PERS uses the Russell 3000 Index as a benchmark.

* Assets were $33 billion, a decrease of $1.87 billion from the end of the first quarter.  The net outflows reduced the assets by another $121 million.  

* What is the asset allocation for PERS? Here ya go. (p.217)

 

Click on image to enlarge.


The S&P 500 lost around 20% from July 1, 2021 to June 30, 2022 while the Russell 2000 lost approximately 15%.  The next report will probably be rather ugly for PERS. 

 

Market returns for PERS since 2000:

2000: 8.4%
2001: -7.1%
2002: -6.6%
2003: 3.5%
2004: 14.6%
2005: 9.8%
2006: 10.7%
2007: 18.9%
2008: -8.2%
2009: -19.4%
2010: 14.1%
2011: 25%
2012: 0.6%
2013: 13.4%
2014: 18.3%
2015: 3.5%
2016: 1.16%
2017: 15%
2018: 9.2%
2019: 6.8% 

2020: 3%

2021: 32.7%

5-year average:13.34

10-year average: 10.3%

Assumed rate of return: 7.5% 

 

Employer Contributions

2011: 12%
2012: 14.26%
2014: 15.75%
2019: 17.4%

 

 

 The Callan report is posted below.  Start on p. 207.

 

 

 


19 comments:

Anonymous said...

KF, get ready for a freak out from the "see no problem, hear no problem, ignore all problems" crowd.

Anonymous said...

No big deal. The Democrats bailed out pensions of Illinois and California. Who cares if the non-pensioned taxpayers have to eat this pile of poop?

I'm sure that flexible Wicker will "negotiate" a PERS bailout in exchange for his help to drive us into a more Marxist Union.

Kingfish said...

Won't surprise me after he sold out last week.

Anonymous said...

So, what is the percentage of its funding in relation to its present obligations? That's the number that makes everybody very happy.... or very nervous.

Anonymous said...

How did Wicker sell us out last week? This is my lone source of local news. I have no doubt that Wicker sold us out. He turrible.

Anonymous said...

As a state employee I wish I had the money I have been paying into PEERS. I have no choice in the matter. I have other investments in case PEERS bites the dust.

Anonymous said...

People act all hand-wringy to learn that the market sometimes goes down. That's kind of like worrying that the sun sometimes sets.

Meanwhile, the PERS portfolio exceeded its assumed ROR more than half the time over the last 22 years listed.

The real question seems to be is the actual performance sufficient, accounting for all other factors?

Anonymous said...

Hell, they’d get better results just putting it all in a online savings account.

Anonymous said...

@3:44 (1)
Why am I not surprised that a state employee doesn’t know their retirement is called PERS and is not pronounced peers?

Anonymous said...

To all at or near retirement...get more booster shots!

Anonymous said...

A 7% assumed return is the first crime. Sets the bar very low for the board. And gives them the excuse to ask for higher contribution rates. All the while how many 20 year periods has the market not made 9%. Use the actual return over the last 50 years as the expediter return. They lowered the expected return years ago due to low interest rates. Well, that’s over.

Steve said...

Thanks Joe. My deferred comp also took a hit last quarter of over 9%.

Anonymous said...

Legislators, every single one of them, is/are as guilty as Lamar Adams. They all are gaining a benefit while deferring the problem to our grandchildren. By the time somebody steps up and calls it out, it will fold as quick as the timber deeps scam. But these cats will be dead by then.

Anonymous said...

I don't know of anyone that works for the state that calls it PEERS.

Anonymous said...

Kingfish went to the trouble of posting a table called Market Returns Since 2000. I assume he did that for a reason. Even someone with average intelligence and just a few seconds of spare time can see that there are many more appearances of black numbers than of red numbers.

The 'coffin-tackers' and 'neighborhood nay-sayers' always come out of the knotholes when The Fish gets all orgasmic and giddy over a PERS report.

Wonder why he didn't offer his usual comparison of PERS with parallel status-reports of defined-contribution plans.

Anonymous said...

@9:14 AM

It's not the market returns that are the problem. Is that for decades, they have not required actuarially sound contributions and have been promising workers essentially that future taxpayers would pay their pension. What matters if the unfunded obligation, which I think was somewhere in the $17B range before this year's dip.

The "naysayers" are doing PERS participants a favor, by reminding them that PERS is eventually going to break, so if they're thinkging they are going to be receiving pers decades in the future, they need to plan for a significant haircut, just in case.

Anonymous said...

@August 9, 2022 at 6:38 PM

The 7% return is still considered relatively aggressive. Remember that PERS cannot just invest in stocks, so that is a combined return for their stocks and fixed income. By having it at 7%, rather than something more conservative, it allows them to report a lower unfunded obligation and allows them to avoid recommending that contributions be raised.

Kingfish said...

$19 billion I think in unfunded liabilities.

Anonymous said...

Ah, the sad old 'haircut guy' returns at 3:47. I wonder if he sings the same gloom and doom song regarding social security, which he would also call a ponzi?



Recent Comments

Search Jackson Jambalaya

Subscribe to JJ's Youtube channel

Archives

Trollfest '09

Trollfest '07 was such a success that Jackson Jambalaya will once again host Trollfest '09. Catch this great event which will leave NE Jackson & Fondren in flames. Othor Cain and his band, The Black Power Structure headline the night while Sonjay Poontang returns for an encore performance. Former Frank Melton bodyguard Marcus Wright makes his premier appearance at Trollfest singing "I'm a Sweet Transvestite" from "The Rocky Horror Picture Show." Kamikaze will sing his new hit, “How I sold out to da Man.” Robbie Bell again performs: “Mamas, don't let your babies grow up to be Bells” and “Any friend of Ed Peters is a friend of mine”. After the show, Ms. Bell will autograph copies of her mug shot photos. In a salute to “Dancing with the Stars”, Ms. Bell and Hinds County District Attorney Robert Smith will dance the Wango Tango.

Wrestling returns, except this time it will be a Battle Royal with Othor Cain, Ben Allen, Kim Wade, Haley Fisackerly, Alan Lange, and “Big Cat” Donna Ladd all in the ring at the same time. The Battle Royal will be in a steel cage, no time limit, no referee, and the losers must leave town. Marshand Crisler will be the honorary referee (as it gives him a title without actually having to do anything).


Meet KIM Waaaaaade at the Entergy Tent. For five pesos, Kim will sell you a chance to win a deed to a crack house on Ridgeway Street stuffed in the Howard Industries pinata. Don't worry if the pinata is beaten to shreds, as Mr. Wade has Jose, Emmanuel, and Carlos, all illegal immigrants, available as replacements for the it. Upon leaving the Entergy tent, fig leaves will be available in case Entergy literally takes everything you have as part of its Trollfest ticket price adjustment charge.

Donna Ladd of The Jackson Free Press will give several classes on learning how to write. Smearing, writing without factchecking, and reporting only one side of a story will be covered. A donation to pay their taxes will be accepted and she will be signing copies of their former federal tax liens. Ms. Ladd will give a dramatic reading of her two award-winning essays (They received The Jackson Free Press "Best Of" awards.) "Why everything is always about me" and "Why I cover murders better than anyone else in Jackson".

In the spirit of helping those who are less fortunate, Trollfest '09 adopts a cause for which a portion of the proceeds and donations will be donated: Keeping Frank Melton in his home. The “Keep Frank Melton From Being Homeless” booth will sell chances for five dollars to pin the tail on the jackass. John Reeves has graciously volunteered to be the jackass for this honorable excursion into saving Frank's ass. What's an ass between two friends after all? If Mr. Reeves is unable to um, perform, Speaker Billy McCoy has also volunteered as when the word “jackass” was mentioned he immediately ran as fast as he could to sign up.


In order to help clean up the legal profession, Adam Kilgore of the Mississippi Bar will be giving away free, round-trip plane tickets to the North Pole where they keep their bar complaint forms (which are NOT available online). If you don't want to go to the North Pole, you can enjoy Brant Brantley's (of the Mississippi Commission on Judicial Performance) free guided tours of the quicksand field over by High Street where all complaints against judges disappear. If for some reason you are unable to control yourself, never fear; Judge Houston Patton will operate his jail where no lawyers are needed or allowed as you just sit there for minutes... hours.... months...years until he decides he is tired of you sitting in his jail. Do not think Judge Patton is a bad judge however as he plans to serve free Mad Dog 20/20 to all inmates.

Trollfest '09 is a pet-friendly event as well. Feel free to bring your dog with you and do not worry if your pet gets hungry, as employees of the Jackson Zoo will be on hand to provide some of their animals as food when it gets to be feeding time for your little loved one.

Relax at the Fox News Tent. Since there are only three blonde reporters in Jackson (being blonde is a requirement for working at Fox News), Megan and Kathryn from WAPT and Wendy from WLBT will be on loan to Fox. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both and a torn-up Obama yard sign will entitle you to free drinks served by Megan, Wendy, and Kathryn. Get your tickets now. Since this is an event for trolls, no ID is required. Just bring the hate. Bring the family, Trollfest '09 is for EVERYONE!!!

This is definitely a Beaver production.


Note: Security provided by INS.

Trollfest '07

Jackson Jambalaya is the home of Trollfest '07. Catch this great event which promises to leave NE Jackson & Fondren in flames. Sonjay Poontang and his band headline the night with a special steel cage, no time limit "loser must leave town" bout between Alan Lange and "Big Cat"Donna Ladd following afterwards. Kamikaze will perform his new song F*** Bush, he's still a _____. Did I mention there was no referee? Dr. Heddy Matthias and Lori Gregory will face off in the undercard dueling with dangling participles and other um, devices. Robbie Bell will perform Her two latest songs: My Best Friends are in the Media and Mama's, Don't Let Your Babies Grow up to be George Bell. Sid Salter of The Clarion-Ledger will host "Pin the Tail on the Trial Lawyer", sponsored by State Farm.

There will be a hugging booth where in exchange for your young son, Frank Melton will give you a loooong hug. Trollfest will have a dunking booth where Muhammed the terrorist will curse you to Allah as you try to hit a target that will drop him into a vat of pig grease. However, in the true spirit of Separate But Equal, Don Imus and someone from NE Jackson will also sit in the dunking booth for an equal amount of time. Tom Head will give a reading for two hours on why he can't figure out who the hell he is. Cliff Cargill will give lessons with his .80 caliber desert eagle, using Frank Melton photos as targets. Tackleberry will be on hand for an autograph session. KIM Waaaaaade will be passing out free titles and deeds to crackhouses formerly owned by The Wood Street Players.

If you get tired come relax at the Fox News Tent. To gain admittance to the VIP section, bring either your Republican Party ID card or a Rebel Flag. Bringing both will entitle you to free drinks.Get your tickets now. Since this is an event for trolls, no ID is required, just bring the hate. Bring the family, Trollfest '07 is for EVERYONE!!!

This is definitely a Beaver production.

Note: Security provided by INS
.