Tennessee Consolidated Retirement System Ends FY21 with Historic 25% ROI

The Tennessee Consolidated Retirement System closed the fiscal year, ending June 30, 2021, with a historic return on investment of 25.6%, the fourth highest annual return percentage recorded by TCRS since its consolidation in 1972.

The record annual profits represent over $ 13.6 billion in new investment income added to the portfolio in a single year. The value of TCRS ‘portfolio stood at $ 65.3 billion at the end of fiscal year 21. TCRS paid $ 2.8 billion in benefits to 148,025 state retirees, 92% of whom remain in the state. Tennessee. Retirement benefits paid by TCRS have an economic impact in all 95 counties.

The Research published by Pew Charitable Trusts last month which ranked the TCRS as one of the best-funded state pension programs in the country. A non-profit organization focused on non-partisan government research, Pew Charitable Trusts has listed Tennessee, along with Wisconsin and South Dakota, as the best prepared to deliver on pension promises made to public sector employees. While pension plans across the country are under scrutiny for their performance, the TCRS pension is booming. Fiscal 21 marked the 12th consecutive year of positive returns for the TCRS.

State Treasurer David H. Lillard, Jr. points to sound financial management and proactive investment management as the source of its success.

The Tennessee General Assembly has consistently voted in favor of fully funding the actuarially determined contribution – a key factor in Pew’s recognition of successful public pension plans. In April, the 112th Tennessee General Assembly earmarked a historic one-time contribution of $ 250 million to the TCRS state and higher education plan. The largest contribution in TCRS history, this contribution will further strengthen the pension and help reduce future recurring contributions.

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“When pension plans across the country are scrutinized for their performance, TCRS is booming. Our governor and general assembly ensure that the plan is fully funded each year, ”Treasurer Lillard said. “The Tennessee Treasury Department strives to be good stewards of the state’s financial resources. These $ 13.6 billion in investment income demonstrate our commitment to active and retired members of the TCRS pension plan.

For every $ 100 paid in retirement benefits today, $ 67 comes from investment income. Tennessee Treasury Investments Division, headed by Chief Investment Officer Michael Brakebill, manages the majority of TCRS assets in-house, significantly reducing investment costs by employing an in-house team of well-trained investment professionals. , vocational training and certifications. This team includes members with solid experience as an institutional investor in the public and private sectors. The TCRS portfolio is structured to be a naturally conservative fund and is broadly diversified to minimize risk.

“The 25.6% return was particularly satisfactory given the conservative nature of our investment policy,” said Mr. Brakebill. “The investment team greatly appreciates the support and essential resources provided by Treasurer Lillard and the Tennessee General Assembly.”

For the 33rd consecutive year, the TCRS has received a Certificate of Excellence in Financial Reporting from the Government Finance Officers Association (GFOA) for its FY20 Full Annual Financial Report. The GFOA said the report was judged by an impartial panel “to meet the high standards of the program, which includes demonstrating a constructive spirit of full disclosure to clearly communicate its financial story and motivate potential users and groups. users to read the report “. The Certificate of Achievement is the highest form of recognition in government accounting and financial reporting.

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