Local public retirement systems in Texas in aggregate beat the average assumed rate of return for the 10- and 20-year periods ended Sept. 30, according to a report released Tuesday at the Texas Association of Public Employee Retirement Systems' annual educational conference in Austin.
The systems' 10- and 20-year returns came in at composite averages of 8.9% and 8.3%, respectively, compared with the average assumed rate of return of 8.1%. Fifty-two funds, representing $23.8 billion in assets, responded to the TEXPERS survey.
For 20-year returns, the top three pension plans were unchanged from last year's survey. The $3.6 billion Dallas Police & Fire Pension System led all responding plans at an annualized 9.11% return, followed by the $1.1 billion El Paso Firemen & Policemen Pension Fund, 8.81%; and the $2 billion Houston Municipal Employees Pension System.
Houston Municipal's assumed rate of return is 6.5%, the only respondent reporting one of less than 7%. Five pension plans listed rate assumptions of 8.5%, the highest reported.
Survey respondents' asset allocations as of Sept. 30 show a slight uptick in domestic and international equity from the previous year, with a small dip in fixed income. The average asset allocation is 26.1% fixed income, 26% domestic equity, 17.5% international equity, 12.5% other, 10.2% real estate and 7.7% private equity.