Big Year for Pension Fund

2007 March - Investments Earned 16.72% in '06 - Boosted by another of its late season rallies in November and December, the Massachusetts pension investment fund earned 16.72% in Year 2006, continuing to maintain its standard as one of the top performing public funds in the country.


After a dismal start in the first three years of this century, with
the fund losing a combined 15.46% during that period, the fund, known
as the CommonwealthÕs Pension Reserves Investment Trust (PRIT) Fund,
has had four straight strong double-digit market years. The Fund, now
$46.7 billion, has earned 11.38% on an annualized basis since its
inception in 1984.

The Fund was created in order to address the
massive unfunded pension liability of the State and TeachersÕ
Retirement systems, with a current full-funding target date of 2023.
"Since the fund assumes an annual earnings of 8.25%, which has been
exceeded by three percent, it puts us in a stronger position to raise
the $12,000 COLA base," says Association President Ralph White.

Under
law, local retirement systems are allowed to place their pension funds
within PRIT for investment. Twenty-nine of these systems have placed
all of their money in PRIT and another forty-four have placed part of
their pension funds within PRIT."The systems, whose money is fully
invested in PRIT, will have a year 2006 earnings comparable to the
state and teachers," said White. "Retirement boards, which manage their
own investments, should also show some outstanding numbers for '06. It
was a good year all-around."

The Fund has an asset allocation consisting
of a number of categories. The big winners last year were international
equities (26.55%), emerging markets (28.13%), real estate (25.41%) and
alternative investments such as buyouts and venture capital (40.38%).

On
the down side, timber, which earned only 5.17% last year because of a
weak southern pine market, still has had an annualized earnings of
13.68% since it was included as an asset category by PRIM five years
ago.PRIM (Pension Reserves Investment Management) Board, chaired by
State Treasurer Tim Cahill, is a nine-member board which, along with a
21-person professional staff led by Director Mike Travaglini, manages
the PRIT Fund. Cahill, since taking over the Fund's leadership four
years ago, has broadened the Fund's investment categories, including a
successful hedge fund, to avoid wide earning swings, especially in a
down market year.

Tags: