TEXPERS Scores Gains in 2020 Despite Rocky Stock Market

The pension systems for Texas cities’ firefighters, police and municipal employees scored gains in 2020 despite the peak-to-trough stock market decline of more than 35 percent during March and April 2020 due to the pandemic. Despite that significant recent decline, the 42 system members of the Texas Association of Public Employee Retirement Systems responding to an annual survey hit the average actuarial targets of 7.4 percent in annualized returns for the five-year period.

These combined portfolios amounted to $54.98 billion at the close of the survey period. The median target rate of the 100 pension systems monitored by the Pension Review Board of Texas is 7.25 percent.

The survey, conducted for TEXPERS by the Maples Group, confirmed also that the local pension systems that provide secure retirement for public servants successfully diversified portfolio assets to smooth over the market roller coaster rides of the last 20 years. The systems have outperformed the 5.2 percent average of an industry standard global aggregate index of 60 percent stocks and 40 percent bonds. In addition, the systems overcame three significant bear market events with some of the largest drawdowns of equity markets since the Great Depression.

“Pensions must succeed over the long term in matching overall performance to the decades-long careers of public employees,” said James Smith, the president of TEXPERS’ board of directors. “The pension systems must deliver on the promises of city employers for the deferred benefits of retirement security.”