SDCERS' Final Investment Return for FY 2021

Date: Sep 10, 2021


At today's Board meeting, SDCERS’ Investments Team reported a final return of 24.9% (net of fees) for Fiscal Year 2021. As of June 30, 2021, the trust fund’s assets totaled just over $10 billion – the highest level SDCERS has seen in its history! The end of fiscal year total reflects a net increase of about $2.0 billion since June 30, 2020. SDCERS’ average rate of return over the past 20 years is 7.8%, and since its inception is 9.1%.
There are a few ways to measure an investment portfolio’s performance. One way we measure our performance is by comparing our actual rate of return to the actuarial rate of return, which is the expected earnings rate determined by SDCERS’ actuary and used to calculate things like contribution rates. We are happy to report that our 24.9% return is vastly greater than our actuarial rate of return of 6.5%, which indicates SDCERS is maintaining its long-term investment strategy to ensure the continued payment of promised pension benefits to its members.
Another way to measure performance is by comparing our returns to a policy benchmark, which is how the total fund would perform if it was completely invested in index funds for each of the assets classes it was invested in. This fiscal year SDCERS outperformed its benchmark which had a 24.4%  return.
Performance can also be measured in comparison to other public pension plans, although it is important to remember that plans have very different sizes, circumstances, and funding statuses which impacts their asset allocations and in turn their return targets. Over longer time periods, SDCERS stacks up very well with its peers – over the past 20 years, SDCERS experienced higher returns than 93% of the 192 other plans in our peer group.

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