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Retirement System Investment Commission cites 10.5% return, schedules asset‑liability study
Summary
At its meeting, the Retirement System Investment Commission said the fund earned roughly 10.5% for the fiscal year, reported net positive benefit payments and approved a staged asset‑liability study that will inform strategic asset allocation decisions in 2025.
The Retirement System Investment Commission heard a positive performance update and approved a multi‑stage asset‑liability study that staff said will guide any changes to the fund’s strategic asset allocation.
Chief Investment Officer Jeff told commissioners the plan “did earn roughly 10 and a half percent” for the fiscal year and that, for the first time in recent years, net benefit payments turned positive — contributions exceeded distributions over the period. Jeff said that shift improves the plan’s liquidity profile and reduces near‑term pressure on asset sales to meet benefit payments.
The commission’s consultant, Mark, framed the results against peers and said RSIC’s diversified, private‑markets‑heavy approach has delivered consistent excess returns versus policy benchmarks over multiple horizons. Mark advised commissioners that the single largest driver of long‑term outcomes is the strategic asset allocation, and he recommended treating the upcoming asset‑liability study as a long‑term, not tactical, review.
The staff described the study’s scope and timeline: education and initial presentations now, preliminary results for commissioner review in December, and a target window for final asset allocation decisions in March–April 2025. Staff said the study will use multiple analytical approaches — 5,000‑run stochastic simulations, deterministic heat maps, historical stress tests (including stagflation scenarios) and a liquidity‑coverage ratio — to show how alternative portfolios affect funded status, contribution requirements and liquidity under stressed scenarios.
Mr. Hitchcock, the commission’s chief executive officer, used the discussion of liabilities to underscore the sensitivity of actuarial measures to discount rates. Presenters illustrated that lowering the actuarial assumption by one percentage point materially increases present‑value liabilities and stressed that the commission will weigh funded‑status trajectories and contribution assumptions as part of the study.
The packet the commission received also noted a brief compliance notification: private equity performance in a recent quarter briefly changed the private‑markets exposure relative to policy limits, requiring disclosure at the meeting. Staff emphasized that the notification was procedural and part of the commission’s regular oversight.
Next steps: initial asset‑liability outputs will be presented in December and commissioners were told to expect a final policy decision process in March–April 2025, with staff tailoring scenario analyses and liquidity metrics to commissioner priorities.
