NHRS Realizes 5.7% Investment Return in Fiscal Year 2019

Trust fund assets stood at $9.2 billion as of June 30, 2019

Oct 18, 2019
  • Investments

For Immediate Release: October 18, 2019
Contact: Marty Karlon, Public Information Officer, (603) 410-3594; [email protected]

CONCORD, NH – The New Hampshire Retirement System (NHRS, the retirement system) realized a 5.7% return on investments in the fiscal year ended June 30, 2019.  

The three-year, five-year, 10-year, 20-year, and 25-year returns for the periods ended June 30, 2019, were 9.3%, 6.4%, 9.9%, 5.9%, and 8.2%, respectively.  All returns are net of fees. The retirement system’s assumed rate of investment return is 7.25%.

“As long-term investors, we know that we will see returns above and below our assumed rate of return in any given year. We continue to emphasize that our primary focus is to meet or exceed the retirement system’s assumed rate of return of 7.25% over the long term,” said NHRS Executive Director George Lagos.

At the close of the fiscal year, the retirement system’s unaudited net position held in trust was $9.208 billion, an increase of $334 million over the prior fiscal year, which stood at $8.874 billion. In the decade since June 30, 2009 – the depths of the great financial crisis – NHRS trust fund assets have more than doubled, despite paying out more than $6 billion in benefits over that same period. Eighty percent of benefit recipients continue to reside in New Hampshire, which means most of these benefit payments remain in-state, helping support the local economy.

NHRS pursues a long-term investment strategy designed to meet its funding requirements. The Board of Trustees, with research and input from NHRS investment staff, outside experts, and a recommendation from the Independent Investment Committee (IIC), set an investment policy that includes asset allocation targets and ranges.  The IIC continuously monitors and evaluates performance on a monthly basis, and makes determinations regarding the hiring and retention of fund managers. 

Compared to the members in the InvestorForce Public Defined Benefit Net Universe, which consists of 535 public pension plans totaling $700 billion in assets, NHRS performed better than two-thirds of its peers over the three-, five- and 20-year periods and better than 85% of its peers over the 10- and 25-year periods. The one-year return was below the median, with NHRS placing just outside the bottom third of all plans. 

NHRS has a diversified investment portfolio which, in any given year, can diverge from market indices. The long-term goal of this approach is to reduce risk and mitigate volatility. In FY 2019, NHRS’ domestic equity portfolio (i.e. stocks) trailed the S&P 500 index because it included stocks not in the index, and the fixed income portfolio was underweight in US Treasuries, which outperformed many other fixed income vehicles. 

Further information on the retirement system’s investment performance is available online at: https://www.nhrs.org/funding-and-investments/investments

Detailed fiscal year 2019 financial and investment information will be included in the retirement system’s Comprehensive Annual Financial Report (CAFR) and Comprehensive Annual Investment Report (CAIR), both due out in December.

About NHRS

NHRS provides retirement, disability, and death benefits to its eligible members and their beneficiaries.  The State of New Hampshire and nearly 470 local government employers participate in NHRS for their employees, teachers, firefighters, and police officers.  NHRS has approximately 48,000 active members and 37,000 benefit recipients. NHRS administers a defined benefit plan qualified as a tax-exempt entity under sections 401(a) and 501(a) of the Internal Revenue Code. 

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