Georgetown 2016 Pension Performance

Performance of the Texas Municipal Retirement System (TMRS) was revealed at the end of last month by RVK. RVK (formerly R.V. Kuhns & Associates, Inc.) one of the largest fully independent and employee-owned investment consulting firms in the US, provides world-class investment advice to institutional investors. The following charts are from their presentation to the TMRS Board.

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The stock market, as represented by the S&P 500, returned 11.96% over the last year and 14.66% and 6.95% over the last five years and ten years respectively. Most of this improvement ocurred after the presidential election.

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This chart shows that TMRS earned 7.04% in 2016 while the S&P earned 11.96%. TMRS earned 6.45% and 5.98% over the last five and ten years respectively. TMRS significantly underperformed the S&P 500 over the various time periods while investing in higher risk elements like Private Equity and Absolute Return.

It would seem the assumed 6.75% rate of return is still too aggressive and should be scaled down to meet actual performance over recent years. It could be increased later if performance warrants such a move.