The financial performance of Teachers’ Retirement System of Oklahoma’s investments was among the top 1 percent in the country last fiscal year, according to a report scheduled to be presented Wednesday to the Oklahoma State Pension Commission.
Buoyed by a strong stock market, Teachers’ Retirement System investments grew by 22.4 in the fiscal year that ended June 30.
That performance was among the top 1 percent of about 1,700 public defined benefit pension systems that were included in the report, according to Don Stracke, senior consultant for Boston-based NEPC LLC.
Other state pension funds experienced major investment gains last fiscal year, as well:
Oklahoma Public Employees Retirement System investments gained 18 percent and ranked in the 15th percentile.
Oklahoma Firefighters Pension and Retirement System investments gained 17.8 percent and ranked in the 17th percentile.
State of Oklahoma Uniform Retirement System for Justices and Judges investments gained 17.7 percent and ranked in the 18th percentile.
Oklahoma Law Enforcement Retirement System investments gained 16.4 percent and ranked in the 40th percentile.
Oklahoma Police Pension and Retirement System investments gained 15.4 percent and ranked in the 60th percentile.
Retirement Plan for Full-Time Employees of the Department of Wildlife Conservation investments gained 15 percent and ranked in the 65th percentile.
Tom Spencer, who serves as both executive director of the Oklahoma Public Employees Retirement System and interim executive director of the teachers’ pension system, said he is excited by the how well investments of those entities have performed.
“I’ve only been at teachers’ for five months, but clearly their investment performance has just been outstanding for the past several years,” Spencer said.
The financial performance of the public employees pension system also has been very good, he said.
“The interesting thing about this is that the funds have such different ways that they manage their investments,” he said.
The teachers’ pension system relies heavily on active investments, while maintaining some passive investments, but that approach is flipped for the public employees’ retirement system, he said.
The teachers’ pension system also has significant investments in real estate and master limited partnerships associated with energy pipeline companies, Spencer said. Values for many master limited partnerships soared last fiscal year.
“It’s interesting that they’ve kind of gotten to the same very good performance by completely different means,” Spencer said.
One reason for that may be that both avoided hedge funds, which didn’t do so well last year, he said.
“This was one year where you wanted to be exposed to U.S. domestic equities (stocks), and both funds were,” he said.