September 13, 2012 / 9:47 PM / 5 years ago

Pennsylvania's teacher pension returns 3.4 pct in fiscal 2012

Sept 13 (Reuters) - Pennsylvania's public pension fund for school teachers returned 3.4 percent in fiscal 2012, it said on Thursday, falling short of its goal but outperforming many other state-level pension systems.

The state's $48.8 billion Public School Employees Retirement System, the 17th largest state-sponsored defined benefit public pension fund in the U.S., had membership of nearly 474,000 active and retired school employees as of June 30.

Over the past few years, PSERS' board and staff have cut the fund's exposure to equities, added risk-parity assets and lowered its long-term actuarial investment rate of return assumption to 7.5 percent from 8 percent.

"Those efforts have paid off over the past fiscal year as PSERS outperformed many of its peers while significantly reducing risk and volatility in the Fund," PSERS Chief Investment Officer Alan Van Noord said in a statement.

The fund also posted a nearly 12.6 percent return over a three-year period, 7.2 percent over 10 years and 8.4 for the past 25 years.

For many large public pension funds, fiscal 2012 was challenging. The $150.6 billion California Teachers pension fund, or CalSTRS, earned 1.8 percent in fiscal 2012.

Various New York City pension funds reported an annual return of 1.7 percent, and Florida's $122.7 billion fund grew just 0.29 percent.

Pennsylvania has a separate $25 billion pension fund for state employees. It has more than 228,000 members.

It follows a different fiscal year, but its one-year rate of return as of June 30 was 1.9 percent, net of fees, a spokeswoman said. It has also returned 6 percent so far in calendar year 2012.

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