CERS, KRS Pension assets return 9.54%, Insurance assets 10.15% in FY 2023

FRANKFORT— The Kentucky Public Pensions Authority (KPPA) announced that the composite return for pension assets under management was 9.54% for the fiscal year ended June 30, 2023, while insurance trust assets under management earned 10.15%. Both the pension and insurance trusts beat their respective benchmark returns.

Buoyed by those returns, General Fund appropriations authorized by the Legislature, and employer contributions, total assets in the systems operated by KPPA increased to a record $23.9 billion in Fiscal Year (FY) 2023.

The KPPA Office of Investments announced that the County Employees Retirement System (CERS) Nonhazardous and Hazardous pensions and insurance fund composite investment returns were both 10.3% for the 12 months ended June 30, 2023.

The composite for the Kentucky Retirement Systems (KRS) Nonhazardous and Hazardous pension funds was 7.5%, while the KRS insurance fund composite return was 9.7%. KRS includes the pension and insurance funds for the Kentucky Employees Retirement System (KERS) and the State Police Retirement System (SPRS).

All pension and insurance fund composite returns exceeded their investment benchmarks of 9.5% for the CERS pension and insurance funds, 7.3% for the KRS pension funds, and 8.7% for the KRS insurance funds.

"The investment staff was able to navigate an extremely challenging investment landscape to deliver strong risk-adjusted performance for the systems and participants by adhering to our disciplined approach and strategy," said Steve Willer, KPPA Chief Investment Officer.

Additionally, long-term rates of return for all pension and insurance funds exceeded the FY 2023 actuarially assumed rates of return, which were 5.25% for the KERS Nonhazardous and SPRS pension funds and 6.25% for all other pension and insurance funds.

David Eager, KPPA Executive Director, said, "These favorable investment results contribute to the continuing improvement in the financial status of all 10 pension and insurance funds."

The positive investment performance, coupled with actuarially required contributions and legislative appropriations, resulted in a $2.3 billion increase in assets from the end of FY 2022.

For more detailed information about FY 2023 returns, including breakouts of individual CERS, KERS, and SPRS funds and asset classes, please visit the Monthly Performance Reports page in the Investments section of KPPA's website. For further information about individual asset classes, consult each system's Investment Policy Statement.