KPPA Pension, Insurance Funds Earn 25% Net Return in Fiscal Year 2021

FRANKFORT, KY – Kentucky’s pension and insurance funds for state and local government employees and the State Police collectively earned an investment return of 25% net of fees for the fiscal year ended June 30. The strong performance pushed total Kentucky Public Pensions Authority assets to $22.7 billion. The returns for each of the 10 funds was significantly above their actuarial assumptions and will improve every plan’s funded status and help reduce employers’ pension costs.

Last year’s performance also marks the highest single-year investment return in the history of the organization, eclipsing the 24% return recorded in 1997. The pension and insurance fund returns also beat their respective Investment Policy Statement Benchmarks by 68 basis points and 24 basis points for the fiscal year.

“The returns above the benchmarks mean that our investment staff and Committees added over $100 million to the assets versus the alternative of having passive (indexed) portfolios,” said KPPA Executive Director David Eager.

The overall performance in fiscal year 2021 raised the long-term rates of return for the pension and insurance funds above their actuarial assumed rates of return for the first time in ten years. Those actuarial assumed rates of return are 5.25% for the Kentucky Employees Retirement System Nonhazardous and State Police pension funds and 6.25% for all other pension and insurance funds.

“Across both the pension and insurance portfolios, each asset class met or exceeded its individual benchmark return, which further helped make FY 2021 a very successful year,” said Steven Herbert, Executive Director, Office of Investments for the KPPA.

For more information about individual asset classes, consult the Investment Policy Statement. For more information about KPPA’s investments, visit the Investments section of our website.

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The Kentucky Public Pensions Authority is responsible for the investment of funds and administration of pension and health insurance benefits for over 394,000 active and retired state and local government employees, state police officers, and nonteaching staff of local school boards and regional universities.