Last week the State Board of Administration (SBA) released investment performance figures for FY12-13 showing that the FRS Defined Benefit (pension) plan earned a 13.12% return, beating its benchmark by 111 basis points, and ending the year with a market value of $132.4 billion. This year-end market value represents a fund balance increase of $9.65 billion more than last year’s fiscal year-end figure. Ash Williams, Executive Director and Chief Investment Officer for the SBA said, “The strong long-term performance can be attributed to continued prudent diversification of assets, cost controls, and excellent fund manager selection.”
Meanwhile, the FRS Defined Contribution (investment) plan, which provides a flexible alternative to the traditional pension plan, posted year-end gains in returns and participation. The annual return based on aggregate employee fund selection was 10.12%, beating its benchmark of 9.68%. During FY12-13, 26% of newly hired employees elected to join the investment plan and 5,722 pension plan members used their second election to switch to the investment plan resulting in a record high 150,721 member accounts. Additionally, the plan’s year-end assets of $7.9 billion were at a record level, representing an increase of approximately 10% over last year’s fiscal year-end figure.