U.S. Pension Funds Return 6.7 Percent; Sixth Straight Year of Gains

graphs and numbers

U.S. public pension funds saw median returns of 6.76 percent in 2014, according to Wilshire Associates. It marks the sixth consecutive year of positive investment performance for public funds in the U.S.

The country’s corporate pension plans returned 6.92 percent.

More from Bloomberg, via the Salt Lake Tribune:

U.S. public pensions reported median returns of 6.8 percent last year, the sixth year in a row of gains after the financial crisis, according to Wilshire Associates.

The gains, though, are less than the annual investment returns of 7.5 percent to 8 percent that many state and local governments count on to pay benefits for teachers, police and other employees. In the 10 years through Dec. 31, public pensions had a median return of 6.6 percent.

“A lot of the plans can’t be satisfied with a return of less than 7 percent,” said Bob Waid, a managing director at Santa Monica, California-based Wilshire, adding that a portfolio containing 60 percent U.S. stocks and 40 percent U.S. bonds returned 10 percent. “I’m a huge advocate of diversification, but you have to wonder sometimes when you see that the guy who did 60/40 beat you.”

While the Standard & Poor’s 500 Index of U.S. stocks returned 13.7 percent, public pensions were dragged down by international investments. Stagnation in Europe and a strong dollar led to losses of almost 4 percent on foreign stocks, according to Wilshire.

As Pension360 covered this week, the assets of U.S. public plans also rose to all-time highs.


Photo by Andreas Poike via Flickr CC License