Texas Municipal Retirement System Investment Results

TMRS is scheduled to release its latest investment results by the end of the week. The last quarter's results were not very pretty, but, OK given the market environment.  Here are the results for the quarter ending June, 30, 2016.

1.8% gross return over the last year and a 5.6% gross return over the last 5 years. The net returns are smaller. In the face of these returns TMRS continues to assume a 6.75% annual return when they calculate the unfunded amount of pension obligations. This allows them to claim the benefits are 85% funded.

Notice how the performance of the Real Return and Absolute Return assets are dragging down the total fund performance over 5 years. The rationale for investing in these riskier asset classes is that diversification decreases the overall risk of the total fund. Well, the risk may be less, but, the performance is definitely less and substantially lags the performance of the traditional fixed income and U.S. equity classes.