Pension System Gains $6 Billion on Investments, Wins Court Judgment

As covered by, the State Retirement and Pension System saw investment returns for FY 2011 almost 3 times the expected rate of return of 7.75% and won a $73 million judgment against a former actuary.

Thanks to an improving national economy and careful portfolio management, the State Retirement and Pension System blew past its estimates and gained $6 billion in fiscal 2011, a 20% rate of return.The system made most of its money through private equity investments, which make up 47% of the entire portfolio, and had a rate of return of nearly 39%. Private equity and real estate also posted high rates of return – 24% for private equity, and 23% for real estate – but the system had invested substantially less in those areas.

The judgment was recently settled by the Court of Appeals of Maryland.

The state started pursuing $73 million from the actuarial firm — $34 million in lost contributions, and $38.8 million in interest that the state would have received. The case went through the Board of Contract Appeals, then the Baltimore City Circuit Court, which awarded the state only $39 million. This week’s ruling is on the final appeal, which was completely in the state’s favor.

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