PIERRE, S.D. (KELO) — The state’s chief investment officer, Matt Clark, had good news to report Thursday about the South Dakota Retirement System.
He said the $12.353 billion portfolio gained about 16.5% of market value since July 1, when the state’s current fiscal year began.
The board’s trustees on the videoconference call liked what they heard, on the heels of a nearly flat 2.01% last year that, after fees, netted 1.59%.
The system is built on assumptions such as 2.25% inflation and average annual gains of 6.5%.
“Sixteen and a half is pretty nice,” chairman James Johns said.
Clark said the state Investment Council held to a conservative position, with roughly half of the money in stocks and other equities, and the rest spread in bonds and money markets. The gain would have been about 20%, he said, if the council had taken a neutral position of 70% in stocks.
The money primarily is in what Clark described as traditional value stocks such as oil companies and banks, rather than growth stocks such as technology companies.
Returns were ho-hum for a while. “A light switch flipped somehow in November and the value stocks came storming back,” Clark said.
The system’s long-time financial consultant Paul Schrader praised it as “a significant accomplishment.”
SDRS has about 92,000 members currently or previously worked as full-time permanent employees of state government, state universities, school districts, cities, counties and other public entities. They included more than 41,000 active members, 20,000 inactive and 30,000 receiving benefits.
The system took in more than $263 million from employees and employers last year and distributed more than $602 million in benefits and more than $23 million in refunds.