Pension System Reports Annual Returns of 10%

Almost half of Maryland counties are members of the Maryland State Pensions System, with county employees participating in the Pension System and counties contributing to it. The financial health of the System is particularly relevant for those counties, but all counties have a stake in the System as a cost driver in the State’s budget that can affect funding for other local priorities.

Andrew Palmer, the CIO of the State Pension System, will “work with staff to maintain the excess returns while achieving full participation in the positive markets”

According to the Maryland Reporter, the investment performance of the Maryland Pension System reflected the overall market’s strength with a return of more than 10%.

As described by the Reporter, however, 10- and 20-year average investment returns have been lower than the targeted rate,

The year’s performance exceeded the system’s 7.55% target for annual return, and raised the five-year average to 7.64%.

But the 10-year average of investment returns is only 4.15% and the 20-year-average is 5.65%, far below the target. When the pension system consistently doesn’t meet its investment goals, it eventually requires higher contributions from the state budget or a reduction in pension benefits for employees and teachers.

For more, see Pension system investments earned 10% in FY ’17, but long term returns still lag from the Maryland Reporter.