Preliminary calculations indicate that the Ohio Public Employees Retirement System Defined Benefit Fund earned 14.52 percent in calendar year 2012, while the OPERS Health Care Fund returned 13.75 percent. Investment returns are preliminary pending final review, and do not include private equity and real estate, which lag a quarter.
The actual returns were higher than the 8 percent actuarial return rate we use to meet our pension obligations. OPERS has attained an average annual investment return of 8.97 percent over the past 30 years.
As of Dec. 31, 2012, OPERS assets totaled $80.3 billion, an increase of $6.2 billion over the same date in 2011. As a result of 2012 investment returns and recently passed pension legislation, OPERS has achieved a funded status of 80 percent and an amortization period of 25 years, well within the state-mandated 30-year funding period.
The OPERS 2013 Annual Investment Plan, now posted on our website, provides details about the coming year’s investment outlook. It describes the strategic asset allocation, or the specific investment classes where we seek return, in both the Defined Benefit Plan and the Health Care Plan.
As we stated in a recent blog, both will undergo some change in 2013.
One of the highlights, which the OPERS Board of Trustees recently approved, is a 2.5 percent reduction in the public equity and fixed income allocations in both plans. This made room for 2 percent target allocations in each fund for additional risk parity investment and a new Global Tactical Asset Allocation.