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Montgomery County retirement plan posts 16.45% return in 2025, presenter tells board
Summary
A presenter told the Montgomery County Retirement Board the plan earned 16.45% in 2025, driven by strong U.S. and international equity returns and alternatives; board members discussed the plan’s funded ratio and the timeline for a potential cost‑of‑living adjustment.
The Montgomery County Retirement Board heard on Monday that the retirement plan earned 16.45% in 2025, the presenter said, marking the plan’s strongest calendar‑year return since 2019.
"The plan earned 16.45%, so it's the best return since 2019," the presenter, Drew, told the board during an executive summary of performance. He said the plan’s market value rose from about $652,000,000 at the end of the prior year to roughly $752,000,000 at year‑end and reported year‑to‑date gains of approximately $106,000,000 for the 2025 calendar year.
Those gains were driven by equities and geographic diversification, Drew said, citing U.S. equities, international equities and emerging markets as major contributors. "US equities had a strong year, really led by artificial intelligence," he said, and he noted the board’s international exposure participated in a benchmark that was up about 32% while the S&P 500 was near 17%.
Drew also summarized fixed‑income and alternative returns, saying fixed income and high‑yield positions contributed positively and alternatives returned double digits in the period under review. He credited active management in parts of the portfolio, saying it added incremental value versus passive benchmarks.
Board members pressed on the operational implications of strong returns, asking about the board’s funded ratio and the timetable for a retiree cost‑of‑living adjustment (COLA). Commissioners and Drew discussed an actuarial averaging window used in projections and said the plan remained below the roughly 80% threshold that, under the actuary’s approach, constrains a COLA. Drew said the recent gains help the outlook but that the five‑year averaging method means some past negative years remain in the calculation and that it could take about two more years for those earlier results to drop out of the five‑year window.
The board agreed to revisit asset allocation and the investment policy statement in 2026 as a follow‑up item.
Before the presentation and after business concluded, the board approved the Oct. 29, 2025 meeting minutes by voice vote and later adjourned the meeting.
