TRS reports $1.25B asset growth in retirement annuity trust for 2025

The Kentucky Public Pension Oversight Board reported significant financial growth during its recent meeting, highlighting a robust increase in the value of assets held in the Teachers' Retirement System (TRS). As of February 28, 2025, the retirement annuity trust's assets surged to $27.36 billion, marking an increase of $1.25 billion since July 1, 2024. This growth reflects strategic investment decisions, including selling high and buying low, which have contributed to a positive cash flow for the health insurance trust as well.

In 2025, the TRS recorded total cash inflows of $460.1 million, up from $429 million in 2024. This increase was driven by higher employer contributions and successful recovery of federal subsidies, which rose to $124 million from $108.6 million the previous year. However, cash outflows also increased, with benefits paid out reaching $278.4 million compared to $235.6 million in 2024.

The health insurance trust also demonstrated strong performance, with assets growing from $3.32 billion to $3.67 billion over the same eight-month period. The trust remains cash flow positive, a result of the shared responsibility legislation enacted in 2010, which has led to increased contributions from active teachers, retired teachers, and school districts.

The meeting also included discussions on asset allocation, with the TRS maintaining a balanced investment strategy across various asset classes. As of February 2025, the allocation to U.S. equities was at 39.8%, slightly above the target of 38%, indicating effective management of the investment portfolio.

In addition to financial updates, the board reviewed recent legislative changes, including Senate Bill 9, which aims to enhance the pension system's sustainability. The ongoing focus on strategic investments and legislative support is expected to further strengthen Kentucky's public pension system, ensuring long-term benefits for educators and retirees.