Texas-based public pension funds posted an annualized composite return of 8.6% for the 20-year period ended Sept. 30, 2014 said a recent report prepared by the Commonfund Institute for the Texas Association of Public Employee Retirement Systems.
The 8.6% return surpasses the 7.8% average annualized assumed rate of return of the 52 plans that participated in the survey.
The best performing fund over the period was the $11 million Big Springs (Texas) Relief and Retirement Fund, which returned an annualized 10.14%, said Max Patterson, executive director at TEXPERS in a telephone interview. Chanley Delk, chairman at the Big Springs pension fund, could not immediately be reached for additional information.
The second best performer was the $8 million Sweetwater Firemen's Relief and Retirement Fund, Longview, with annualized 9.75% return.
For the one, three-, five-, 10 and 15-year periods ended Sept. 30, the plans surveyed returned an average annualized 9%, 12.5%, 9.5%, 7.2% and 6.4%, respectively.
The top performer for the one-year period was Abilene Firemen's Relief and Retirement Fund, with 12.84%, followed by the $181 million Irving Firemen's Relief and Retirement Fund at 12.41%. An official at the Abilene Firemen's pension fund could not be reached by press time for comment on the pension fund's outperformance and to provide an asset size.
By comparison, larger funds like the $25.3 billion Texas Employees Retirement System, Austin, and $3.9 billion Houston Police Officers' Pension System returned 8.95% and 11.87%, respectively, for the year ended Sept. 30.
Also as of Sept. 30, the average dollar-weighted asset allocation of all the Texas public pension funds surveyed was 27% each domestic equities and alternatives strategies, 22% fixed income, 20% international equities and 4% cash/other. That was a slight change over the previous year, Mr. Patterson said.
As of Sept. 30, 2013, the Texas public pension funds had an average asset allocation of 31.8% alternatives, 24.6% international equity, 22.6% domestic equity, 20% fixed income and 1% cash/other.
The 52 plans surveyed represent about $53 billion in total assets.