NH Retirement System posts gainsBy GARRY RAYNO
State House Bureau
September 19. 2013 9:12PM
CONCORD — The New Hampshire Retirement System’s investment returned 14.5 percent for fiscal year 2013, adding $700 million to its assets.
This year’s returns are a vast improvement over 2012’s when the return was less than 1 percent for the system. For the 2011 fiscal year the return was 23 percent.
“When we have a good number we try not to get too high and toot our horn,” said system public information officer Marty Karlon. “It’s the long term that matters.”
The retirement system has a funded ratio of 56.1 percent, which means the system’s assets are 56.1 percent of the projected cost of current and future benefits for retirees and members. The system’s unfunded liability is $4.5 billion.
Karlon said the additional earnings will help with the unfunded liability but it will not have a huge impact. “We will not know until we have the actuarial evaluation in December,” he said, which takes into account such factors as payroll growth and inflation.
The 3-year, 5-year, 10-year, and 20-year returns for the periods ending June 30 were 12.4 percent, 5.6 percent, 7.2 percent and 7.9 percent respectively.
Compared to its 197 peers with public defined benefit programs, NHRS performed better than 90 percent of its peers over the 1- and 3-year periods and better than 70 percent of its peers over the 5-year period, he said.
“Our investment performance reflects improved economic conditions, Fed monetary policy, and robust performance from domestic equities. While we are pleased with these returns, we continue to emphasize that our primary focus is to meet or exceed the retirement system’s assumed rate of return of 7.75 percent over the long term,” said NHRS Executive Director George Lagos. “Our Independent Investment Committee continues to do a very effective job of carefully managing the risk, return, and liquidity of the portfolio in accordance with the investment policy set by the Board of Trustees.”
The retirement system covers approximately 49,000 active and 28,000 retired public workers. The system includes state, county and municipal employees, teachers, police and fire fighters.
Over the last six years lawmakers have made changes to the system to address its shortfalls, including increasing rates, requiring employees to work longer and limiting end-of-work boosts to pension benefits.