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Monday, July 30, 2012
Maryland's $37 bln. Pension System Earns .36%
Maryland's $37 billion state retirement and pension system for employees and teachers earned .36% over this period.
Last week CALPERS, the country's largest public pension fund, at $233 billion, reported a return of 1% for the 12-month period ended June 30, 2012.
Interestingly, a basic indexed portfolio invested 55% in SPY (S&P 500), 15% in VEU (global less U.S.), and 30% in AGG (U.S. investment grade bond market) would have returned 2.6% before fees.
The difference between .36% and 2.6% for the $37 billion Maryland pension fund amounts to $828 million. That would go a long ways toward paying Maryland teacher pensions.
I have to agree with Jeff Hooke, Chairman of the Maryland Tax Education Foundation, who said the results "look like a minor disaster for fiscal 2011."
Source: MarylandReporter.com Md. pension system earns close to nothing in past year by Len Lazarick
Posted by Robert Wasilewski at 2:06 PM
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From the Baltimore Sun: "Declining to follow the footsteps of Baltimore County's pension plan, Maryland's state employee retirement system decided Tuesday to leave unchanged its assumption about how much it will earn on investments.ReplyDelete
The 14-member pension board voted 11-1 to keep the rate at 7.75 percent, in the middle of the pack for public retirement plans nationwide."
7.75% seems a tad higher than .36%. Call me crazy, but they are way too optimistic in their assumptions.
The quote from the Sun is dated 7/17/2012.Delete
I agree that 7.75% is to high. Another take away for the average investor is that it illustrates the consistent finding that the average person investing in 3 or 4 low cost diversified index funds has a good chance of performing better than 80% of professional investors.ReplyDelete
This is nice post which is all about the pension system that pension system earn or not, yes pension system earn according to the govt policies.ReplyDelete
cashing in pension