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Defined Benefit

Maryland retirement system posts 10% return for year

Maryland State & Retirement Pension System, Baltimore, returned a net 10.02% for the fiscal year ended June 30, exceeding its policy benchmark by 12 basis points.

Spokesman Michael Golden in an email said the $49.1 billion pension fund's best-performing asset class was public equity, which returned a net 19%, slightly below its 19.35% benchmark. That was followed by private equity at 16.4%, above its 13.67% benchmark.

Other asset class returns were: credit, at 10% (above its 9.93% benchmark); cash, 5.1% (0.46%); real assets, 4.7% (5.12%); absolute return, 3.3% (6.37%); and rate-sensitive portfolios, -2.11% (-3.2%).

"Stable and improving economic growth across the globe, along with stabilization in energy markets, supported significant growth in our equity and credit valuations over the past year," said Andrew C. Palmer, chief investment officer, in the news release. "While these returns are welcome, as long-term investors we expect some volatility in meeting the assumed rate of return, which has been and will continue to be our long-term expectation for the system."

The pension fund had announced on July 20 it will be gradually reducing its assumed rate of return to 7.45% from 7.55% over the next two years.

As of June 30, the actual asset allocation was: 38.7% public equity, 21% rate-sensitive portfolios, 12.1% real assets, 10.3% private equity, 9.5% credit, 7.2% absolute return and 1.2% cash.