Investments

Articles about Investments that may be useful to Massachusetts retirees.

Pension Fund Reaches $50 Billion Mark

Continues Climb From '08 Disaster

MARCH 2013 VOICE: A strong investment earnings last year, 2012, of 13.82%, has pushed the Commonwealth’s Pension Reserves Investment Trust (PRIT) Fund’s value over the $50 billion mark for the first time since 2007, when its peak value was $53.7 billion.

The recovery since Year 2008, a disasterous market year’s loss of -29.5 billion, which plunged the fund’s value to $37.8 billion has been a steady process with three of the past four years showing double-digit returns bringing the new value to $51.97 billion.

Pension bonds risky for state and local governments-Moody's

Municipal bonds that states and local governments use to pay for some of their public pension obligations rarely improve the issuer's credit quality, Moody's Investors Service said on Tuesday.

"If bond proceeds substitute for annual contributions to pension plans or are used to pay pensioners, we consider it a deficit borrowing and would view the financing as credit negative," Marcia Van Wagner, the senior Moody's analyst who wrote the report, said in a statement.

PENSION FUNDS

NOVEMBER 2012 VOICE: Buoyed by a strong market surge, the Commonwealth’s $50 billion Pension Reserves Investment Trust (PRIT) Fund increased in value by 8.27% for the first eight months of this year.

This is in contrast to our headline earlier this year, which reported that Year 2011 had been a dismal year with zero earnings, and a closing value of $47.1 billion.

Mass. needs more realistic goal for pension fund returns

Boston Globe Editorial, June 24, 2012

In some ways, lowering expectations for returns on the state’s pension fund investments is an easy call. Current state law requires the Massachusetts pension board to assume an 8.25 percent annualized rate of return, but in recent years that has come to seem too optimistic. Massachusetts needs to start stepping its pension expectations down — but in a deliberate way, to limit the impact on government agencies that will need to contribute more.

State Loses Top Pension Fund Manager

State Loses Top Pension Fund Manager

JUNE 11, 2012: The resignation of Stan Mavromates, the longtime chief investment officer of the Commonwealth’s $50 billion pension fund, has caused some concern among the retirement systems of the Commonwealth holding membership in the fund.

Although the bulk of the Fund is the State and Teachers’ Pension fund, the majority of our 103 city, town and county boards have placed their pension funds within PRIT and depend on PRIT’s investment earnings to increase the growth and value of their own funds.

2011: DOWN YEAR FOR STATE PENSION FUND

JANUARY 25, 2012: Year 2011 was not a good year for the Commonwealth’s Pension Reserves Investment Trust (PRIT) Fund.

Data released at this month’s Pension Reserves Investment Management (PRIM) Board meeting show that the $47.4 billion fund barely creeped into the black with an earnings of 0.26 last year.

After strongly recovering from a disastrous Year 2008 when the Fund lost -29.50% of its value, followed by earnings of 17.06% in Year 2009 and 13.56% in Year 2010, the Fund was a victim of the worldwide market slump last year.

2010 Strong Investment Earnings

2010 Strong Investment Earnings

But Must Tackle Unfunded Liability

Continuing its climb from the abyss of Year 2008 when it lost 29% of its value, the Commonwealth’s pension fund displayed an encouraging investment return of 13.56% for Year 2010.

This followed earnings of 17.46% for Year 2009 and pushed the January 1st value of the fund, known as the Pension Reserves Investment Trust (PRIT) Fund, to $48.3 billion. While still short of the Fund’s peak value of $53.7 billion at the end of ’07, it was uplifting news for the State and Teachers’ Retirement

Pension Funds At Work

SEPT 2007 - This July, the Commonwealth’s pension investment board, PRIM, funded $50 million to the AFL-CIO Housing Investment Trust (HIT) as part of the Economically Targeted Investment (ETI) program. The HIT is headquartered in Washington DC. The firm has managed assets for US tax-exempt clients since 1984 and currently has 393 institutional investors, many of which are public pension funds.

STATE PENSION FUND SEEKS LOCAL INVESTMENTS

2007 JULY - ETI Policy Includes Real Estate - Ever since the Commonwealth’s pension fund (PRIT) adopted an Economically Targeted Investment (ETI) policy in 2003, the program has steadily grown, especially in the area of real estate.

CLINTON TOPPED STATE IN '06

2007 JULY - Pension Fund Investments Earned 18.09% - According to data recently released by the Public
Employee Retirement Administration Commission (PERAC), the Clinton Retirement
Board had the highest pension fund investment return among our state's 106
retirement systems in year 2006.