Vermont reports 7.4% fiscal-year return for state pension funds

Vermont Pension Investment Commission, Montpelier, reported a preliminary fiscal-year net return of 7.4% for three pension funds collectively known as the Vermont State Retirement Systems.

The investment return fell just shy of the policy benchmark of 7.9%, according to the commission's latest investment report.

The $5.8 billion Vermont State Retirement Systems, however, topped its policy benchmarks on a three-, five- and 10-year basis, earning annualized net returns of 7.3%, 6.4% and 6.4%, respectively. The benchmark returns for the respective periods were 7%, 5.7% and 6%.Vermont State Retirement Systems had returned a net -7.7% for the previous fiscal year ended June 30, 2022.

Global equity was the systems' top-performing asset class, delivering a net return of 16.7%, followed by domestic equity and international equity, which earned 14.5% and 7.6%, respectively. Their respective benchmarks were 16.1%, 19% and 16.1%.

As of June 30, the systems' actual allocation was 36.3% global equity, 18.8% core fixed income, 10.2% private equity, 8.5% private debt, 4.7% international equity, 4% U.S. large-cap equity, 3.7% core real estate, 3.5% Treasury inflation-protected securities, 3.2% global fixed income, 2.9% U.S. smidcap equities, 2.7% non-core real estate, 1.4% private infrastructure and 0.1% cash equivalents.

The target allocation is 29% global equity; 19% core fixed income; 10% each private equity and private debt; 7% international equity; 4% each U.S. large-cap equity, global fixed income and non-core real estate; 3% each U.S. smidcap equity, TIPS and core real estate; and 2% each farmland and private infrastructure.