Although liquidity has been a top concern for the Pennsylvania Public School Employees' Retirement System since the coronavirus pandemic hit financial markets in March, it's not a new concern for the $60 billion state plan. And after strategically allocating 6% of its portfolio to cash, plus holding a diverse array of assets, the Harrisburg-based state plan's liquidity remains, well, solid.
PennPSERS projects to have $5.6 billion in total cash by the end of April, well above the $1.4 billion the plan had during the height of the global financial crisis.
"We have more than enough liquidity to continue paying benefits without interruption and meeting our other obligations without having to sell assets at inopportune times," PennPSERS Chief Investment Officer James H. Grossman said.
And like all other plans, market volatility is another concern the fund now faces amidst COVID-19. To deal with this, the pension system's asset allocation and allocation implementation committees meet each week to decide whether to rebalance certain parts of the portfolio and if so, how. They also meet to evaluate market opportunities.
The other major challenge the plan is facing in this pandemic is one that PennPSERS can't control: state revenue shortfalls.