PSPRS Underperforms ASRS, Again

Be thankful you are an Arizona teacher or janitor.

The Public Safety Personnel Retirement System (PSPRS) has managed to under-perform the Arizona State Retirement System again.

PSPRS earned approximately 28% less on its investments than ASRS.

PSPRS could have made approximately an extra $300-400 MILLION more had they just copied ASRS’ investment philosophy!

ASRS Bests PSPRS Again

ASRS Bests PSPRS Again

For those of you who don’t know, ASRS’ investment returns (Chief Executive Paul Matson) have historically outperformed PSPRS’ investment returns year-after-year.

The same was true for this past fiscal year (FY2013/2014).

Arizona State Retirement System (ASRS) performance for FY2013/2014:

  • 19.2% fiscal year investment return (before expenses)
  • Approximately 76% funded

Arizona Republic – August 4, 2014

[ASRS Chief Executive Paul] Matson said ASRS likely will have one of the best investment returns in the country for public pensions with its 18.6 percent net investment growth. A net return is the bottom line after investment fees are paid. The gross return is projected to be 19.2 percent.

Public Safety Personnel Retirement System (PSPRS) performance for FY2013/2014:

  • 13.8% fiscal year investment return (before expenses)
  • Approximately 59% funded

 Arizona Republic – August 4, 2014

At PSPRS, the most recently published combined funded ratio for its three plans was about 59 percent.

Rene Guillen Jr., League of Arizona Cities and Towns legislative director,…  said ASRS also is doing better because its management and board have been active in curbing pension abuses that artificially inflate retirement benefits.

PSPRS’ investment returns =  13.8%

ASRS’ investment returns = 19.2%

PSPRS earned approximately 28% less on its investments than ASRS.

PSPRS’ management appears to be quite proud of their under-performance because they issued the following press release stating-

PRWEB September 8, 2014- (press release excerpt)

We are absolutely pleased with our return rates for the 2014 fiscal year, said PSPRS Chief Investment Officer Ryan Parham.

PSPRS could have made approximately an extra $300-400 MILLION more had they just copied ASRS’ investment philosophy!

PSPRS’ real estate portfolio partially contributed to the significant under-performance relative to the Arizona State Retirement System-

Excerpts from the PSPRS Pension Watch blog at PSPRS.info (Thursday, Sept. 4, 2014)-

“The most glaring thing in the report is the real estate portfolio, which was the only category that lost money.  Real estate had a -0.62% return for the year versus a benchmark return of 11.21%.  PSPRS’ real estate investments are the source of so many problems, so I guess we should not be surprised that these investments are still causing problems.  If real estate investments had achieved a return of just half the benchmark, the PSPRS total fund would have met its benchmark for the fiscal year.”

Doh

 

MORE: Public Safety Pension Is Missing $97 Million

MORE: Complete coverage of pension system

 

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