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Pension Funds

Maryland retirement system nets 8% return in fiscal year

Maryland State Retirement & Pension System, Baltimore, returned a net 8.06% for the fiscal year ended June 30, exceeding its policy benchmark by 46 basis points.

The system now has $51.9 billion in assets, an increase of $2.8 billion over the year. It also surpassed its assumed rate of return of 7.5%. For the fiscal year ended June 30, 2017, the system returned a net 10.02%.

"The system's returns were supported by strong results in both public and private markets," said Andrew C. Palmer, chief investment officer, in a news release.

Private equity was once again the system's best-performing asset class, with a net return of 19.6%. Public equities provided a 10.7% return, followed by private real estate at 9.5%, real assets at 8.2%, absolute return at 3.3%, credit at 2.3% and rate-sensitive strategies at 0.55%.

Spokesman Michael Golden said in an email the system had a three-year annualized return of 6.34% (benchmark 6.33%), a five-year return of 7.15% (6.72%) and a 10-year return of 5.55% (5.04%).

"The board is focused on its obligation to pay member pension benefits in full and on time," said state Treasurer Nancy K. Kopp, chairwoman of the pension board, in the news release. "Investment returns this past year are consistent with the long-term expectations for our diversified asset allocation and the board is pleased that, as a result of its oversight and the diligent work of the system's investment division, this asset growth helps to ensure the sustainability of our plan."

As of June 30, the actual asset allocation was 37.5% public equity, 19.9% rate-sensitive portfolios, 12.5% private equity, 11.9% real assets, 8.4% absolute return, 8% credit and the rest in cash.