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VRS Fund Hit Historic High With a 7.5% Return, Exceeding the Assumed Rate of Return

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VRS Fund Hit Historic High With a 7.5% Return, Exceeding the Assumed Rate of Return

PR Newswire

RICHMOND, Va., Aug. 29, 2018 /PRNewswire/ -- The Virginia Retirement System achieved a 7.5 percent return, net of fees, on its investment portfolio for fiscal year 2018, exceeding the 7 percent assumed rate of return. The trust fund ended the year with approximately $78.6 billion, marking a new high point for the fund.

"The portfolio was able to exceed the assumed rate of return, based on strong performance in several market sectors, especially private assets," Chief Investment Officer Ronald D. Schmitz said. "Longer-term performance generated by staff and its external partners continue to add value compared to passive benchmarks. Over time, this excess performance reduces the cost of providing benefits to public employees."

During fiscal year 2018, the major asset classes performed as follows:

  • Public equity program returned 9.7 percent
  • Private equity program returned 15.8 percent
  • Real assets program returned 9.5 percent
  • Credit strategies program returned 5.2 percent
  • Fixed income program returned -0.1 percent
  • Strategic opportunities program returned 7.0 percent

The portfolio included approximately $31.4 billion in public equity, $12.4 billion in credit strategies, $12.1 billion in fixed income, $10.6 billion in real assets, $7.9 billion in private equity and $1.9 billion in strategic opportunities portfolio, as of June 30, 2018.

"As an investor, VRS focuses on developing strategies that will sustain the fund for the long-term so that VRS is positioned to pay retiree benefits years into the future," VRS Board Chairman Mitchell L. Nason said.

"This positive return generated by the efforts of our investment team exceeds the assumed rate of return and will help improve the funded status of the plan."

About VRS

VRS ranks as the 20th largest public or private pension fund in the U.S. and the 44th largest in the world, serving approximately 705,000 active and inactive members, retirees and beneficiaries. Active members include about 147,000 teachers, 108,000 political subdivision employees and 88,000 state employees. VRS paid out approximately $4.6 billion in benefits to more than 206,000 retirees and beneficiaries in fiscal year 2018. About 86 percent of VRS retirees and beneficiaries reside in Virginia.

 

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SOURCE Virginia Retirement System

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