Connecticut's Largest Pension Plans Tread Water

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The Connecticut Retirement Plans and Trust Funds generated a net investment return of 0.35% for the fiscal year ended June 30, including a 1.15% percent return for the Municipal Employees' Retirement Fund, state Treasurer Denise Nappier announced.

The latter outperformed its investment benchmark of 0.77%, Nappier said in an Aug. 22 statement.

The state's two largest pension funds – the Teachers' Retirement Fund and the State Employees' Retirement Fund– also outperformed their benchmarks, she said. They posted net investment results of 0.26% and 0.25% respectively, for fiscal 2016, against their corresponding investment benchmarks of minus-0.06% and minus-0.01 percent.

"We can only earn what the market will bear and we're always pleased when we beat our benchmarks," Nappier said.  "This low level of absolute performance is consistent with our view that  markets have moved into a financial environment unlikely to yield the robust returns of the past few years."

Longer term, the five-year returns for TERF and SERF are 5.71% and 5.74%, trailing the funds' actuarial return assumptions.  While the seven-year returns are 8.75% for TERF and 8.83% for SERF, the 10-year returns are 5.25% and 5.14%, respectively.

Nappier repeated her call for retirement boards to lower investment return assumptions from 8% to 7%. She has said that bond rating agencies would react favorably.

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Connecticut
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