CT Pension Fund Boasts Solid Performance

November 4, 2005 (PLANSPONSOR.com) - The Connecticut pension fund earned a 10.5% return on investments in the last fiscal year, aided by double-digit growth in its real estate and international stock portfolios.

The Hartford, CT paper, the Journal Inquirer, reports that, although the earnings were down 4.7% from last year’s five-year high of 15.2%,   State Treasurer Denise Nappier said its performance in fiscal 2004-05 still was better than that of 70% of other large public funds.

The median return of public pension plans was 9.95% in the 2004-05 fiscal year, according to the Wilshire Trust Universe Comparison Service, the Journal reports.   The largest public fund, run by the California Public Employees Retirement System (CalPERS), posted a 12.7% return for the year, while the state pension fund in Massachusetts achieved a 13.3% return.

Nappier said that the two-year investment return of 12.8% had added a total of $3 billion to the value of the $21.3 billion Connecticut fund.    She noted that the growth occurred despite pension payments of $1.1 billion, which exceeded contributions to the fund by $943 million.

“We have been working diligently to navigate the scandals of the past administration and turmoil in the stock market and have come through with a solid performance,” she said.    The scandal referred to involves the racketeering and money-laundering conviction of former Connecticut state Treasurer Paul Silvester (See  Former Connecticut Treasurer Settles Kickback Charges ).    He pleaded guilty to charges and was sentenced to a total of four years and three months in prison (See  Former Conn. Treasurer Gets More Jail Time ).

The plan currently directs 36% of the fund’s investments to domestic stocks; 29% to fixed-income securities such as government, corporate, or municipal bonds; 18% to international stocks; and 11% to “private-equity” partnerships – which provide capital to firms that are either unable or unwilling to tap commercial lenders.   It also allocates 5% to real estate holdings and 1% to cash holdings.   Treasury records show that the pension fund’s real estate portfolio was the top performer in the last fiscal year, with a 27.5% return, while its international stocks portfolio returned 19.27%.