ITRS Investments Soar
ITRS investments closed out FY 2021 with more than $10 billion in investment income, an extremely strong rate of return and record assets under management, despite the worldwide economic upheaval caused by the pandemic.
On June 30, 2021, ITRS managed assets totaling approximately $62.7 billion – a record for the System and a 20 percent increase in assets during the year. ITRS closed fiscal year 2020 with $52.3 billion.
Through June 30, 2021 the preliminary fiscal year to-date investment return is expected to exceed 23.1 percent, net of fees. The ITRS long-term investment return exceeded the System’s long-term assumed investment return of 7 percent with a 40-year return during FY 2021 of 9.3 percent.
Through forethought and careful planning, the ITRS Investment Department successfully navigated the perils of COVID-19’s attack on the economy. All public pension systems lost money during the early weeks of the pandemic, but compared to similar public pension systems, ITRS was among the nation’s leaders in protecting member assets. During the first three months of the pandemic, ITRS assets fell from $54.2 billion to $48.5 billion. However, within eight months, dedicated work by the System reclaimed all of the losses, rebuilt the value of the portfolio to $55.7 billion and added another $6.8 billion by the end of the fiscal year.
Dedicated to Equality and Inclusion
The trustees and staff are re-doubling their efforts for the System’s long-standing commitment to increase diversity, equity and inclusion within the ITRS investment program. First, it enlarged the size of a 15-year-old program designed to mentor smaller, “emerging” money managers from a commitment of $750 million to $1 billion.
Along with an increase in funding, the re-doubled effort also focuses on an increase in diversity hiring across asset classes; updated diversity selection metrics; and the development of a standardized evaluation tool to measure diversity, equity and inclusion practices within money management firms.
The total assets in the ITRS portfolio managed by Minority and Women Business Enterprises has increased from $8.2 billion to $13 billion in the last five years. In FY 2021 ITRS continued to exceed its annual aspirational goal to have 20 percent of total assets managed by MWBE firms. Currently, ITRS commitments to MWBE firms total $13 billion, or 21 percent of the System’s portfolio.
Taken together, all of these accomplishments affirm the commitment of the ITRS staff and the entire Board of Trustees to the goal of building one of the premier public pension systems in the United States.
We envision a system that is innovative, transparent, hard-working and responsive to all stakeholders. Above all, we see a system that fulfills its mission – ensure a stable retirement for Illinois educators who dedicated their careers to helping others succeed.
Reaching our goal will take time. The renaissance at ITRS is underway. We look forward to the future and together we are more than ready to conquer new challenges.
- Blue Dog - Friday, Aug 20, 21 @ 5:39 am:
Respectable for sure. But taking credit for market performance is kinda……Trumplike.
- Flyin' Elvis'-Utah Chapter - Friday, Aug 20, 21 @ 6:47 am:
“is kinda….Trumplike.”
…and taking a cheap, back-handed shot at positive news is kinda…youlike.
- Jocko - Friday, Aug 20, 21 @ 7:50 am:
Meanwhile, the Trib editorial board resumes tilting at windmills as the “Last chance to reform Illinois pensions from a position of strength”.
- A - Friday, Aug 20, 21 @ 8:09 am:
Oh-oh. If TRS talks about increased assets, some might be thinking– good, we can take a pension holiday. Isn’t that how it’s worked?
- JS Mill - Friday, Aug 20, 21 @ 8:16 am:
=kinda……Trumplike.=
No.On so many levels.
But never miss an opportunity to criticize amirite?
- EssentialStateEmployeeFromChatham - Friday, Aug 20, 21 @ 8:20 am:
Keep Alexi away from TRS.
- Cool Papa Bell - Friday, Aug 20, 21 @ 8:25 am:
The next year won’t be as easy as the last one with broad returns across many asset classes. Would like to know what TRS’s plans are to protect the $10 billion they made.
- Six Degrees of Separation - Friday, Aug 20, 21 @ 8:42 am:
===Would like to know what TRS’s plans are to protect the $10 billion they made.===
Put it all on Dogecoin, LOL. Seriously, if they could beat their assumed rate of return by just 1% or 2% and string some winning years together, it would probably do more to get the pensions out of the hole than any increased state funding would.
- frustrated GOP - Friday, Aug 20, 21 @ 8:43 am:
So first thought tell me how you compared to other fund managers. Then you a toot the horn. next thought: Just wait till the new actuary report in a year or two when life expectance has wiped out billions in liability.
Then we need to worry about the pension holiday
- JS Mill - Friday, Aug 20, 21 @ 8:49 am:
=tell me how you compared to other fund managers. Then you a toot the horn.=
They made a return of 23%. Speaking as a member of TRS, I couldn’t care less how they “compare” to other fund managers. How do you know if the other fund managers are Bernie Madoff or not?
I’ll take the win even if you won’t.
Another history lesson for the memory impaired- the pension system has remained at about the same funding level (as a % of liabilities) since 1970. Through multiple recessions and major economic calamities. TRS has a loooong history of taking care of their assets.
- Lynn S. - Friday, Aug 20, 21 @ 8:56 am:
I’ll say the same thing I say to family members and young co-workers who like to brag about “how much my assets have gained”:
Until you sell that asset and put the money in the bank, you got nothing but some ink on a scrap of paper.
(And until we can do something about the automatic 3% raise, we’re hosed.)
Yeah, I’m that old and that grumpy.
- Occam - Friday, Aug 20, 21 @ 9:04 am:
Odd that the TRS President’s letter made no mention of how much the unfunded liability might have changed from last year given the funds performance.
- natty lite - Friday, Aug 20, 21 @ 9:06 am:
JS Mill, it is fair and appropriate to ask how 23% compared to the benchmarks for the various asset classes and investment types. You may not care about other managers per se, but you should absolutely care about performance relative to benchmarks. If benchmarks showed a return of 25%, then the investor left a lot of money on the table, even though the raw number sounds good. If benchmarks returned 20%, congrats the investor outperformed.
- Phenomynous - Friday, Aug 20, 21 @ 9:10 am:
TRS had a terrible year last year. Much worse than the other pension systems if I recall correctly. Hope they are able to keep it update.
Side note, an index fund I’m in had about a 19% year to date return with a .01% fee. Not sure what TRS pays in manager fees they can eat up returns pretty quickly, particularly in bad years.
- Flyin' Elvis'-Utah Chapter - Friday, Aug 20, 21 @ 9:12 am:
(And until we can do something about the automatic 3% raise)
Yeah, someone needs to try amending that.
- Nagidam - Friday, Aug 20, 21 @ 9:28 am:
TRS blamed the market in the down years not their actions but are now saying they are great investors in the up years. Odd. I have been pretty happy with my investments the last few years. I literally did nothing to warrant the kudo’s for the increases other than I picked the investment vehicles some years ago.
- Ares - Friday, Aug 20, 21 @ 9:40 am:
Public pension funds are fueling the erosion of the middle class through their investment in leveraged-buyout funds and hedge funds. Why not invest in State infrastructure. and build it back? Keep the toll / concession payments in the state, and away from the foreign investors.
- Thomas Paine - Friday, Aug 20, 21 @ 9:47 am:
=== it is fair and appropriate to ask how 23% compared to the benchmarks for the various asset classes and investment types ===
Is someone blocking you from Google?
Posting questions you can answer yourself using Google on a blog isn’t “fair and appropriate”, it’s a form of trolling.
If you think the question is that compelling, go find the answer and post it.
- Steve Polite - Friday, Aug 20, 21 @ 10:03 am:
“taking credit for market performance”
Market performance and investment strategy are two different concepts. An investment strategy can outperform or underperform the general market.
- Jocko - Friday, Aug 20, 21 @ 10:07 am:
==Public pension funds are fueling the erosion of the middle class==
And yet, when given to chance to have high earners pay their fair share to make up the difference, voters chose to carry Ken Griffin’s water or believe the lie that retirement income would be next.
- City Zen - Friday, Aug 20, 21 @ 10:21 am:
==the pension system has remained at about the same funding level (as a % of liabilities) since 1970==
What percentage of the 1970 budget went towards pensions and what is that percentage today?
- Phenomynous - Friday, Aug 20, 21 @ 10:21 am:
Is someone blocking you from Google?
Yes, it’s a totally run of the mill google search find TRS’ most recent Comprehensive Annual Financial Report, and know how to find their asset allocations and compare them with market averages. Very easy, unsophisticated work for the laymen googlers of the world.
Someone needs a nap.
- Sue - Friday, Aug 20, 21 @ 10:22 am:
Not mentioned in the Release but announced recently is they finally decreased the outsized allocation to hedge funds all the way down to 4 percent. Long time in coming as the hedge fund investments had significantly impacted returns for the last 15 years. Congratulations to the new President of the Board who likely made the call over the objections of staff
- Oswego Willy - Friday, Aug 20, 21 @ 10:32 am:
=== What percentage of the 1970 budget went towards pensions and what is that percentage today?===
Let us know what you come up with.
Thanks.
- natty lite - Friday, Aug 20, 21 @ 10:33 am:
Thomas Paine, it pains me that you wouldn’t use more Common Sense before attacking me. I was merely taking the Liberty to respond to JS Mill’s comment about 23% being a win. 23% is definitely not The American Crisis, but we cannot know if it was really a win without knowing how the benchmarks performed. I thought it went without saying, but it’s not part of the Rights of Man to know the full breakdowns of investment performance from a press release 7 weeks after the end of the fiscal year. Google would tell you it takes several months for those reports to come out. I don’t blame the fund for patting themselves on the back, but it doesn’t make me a summer soldier or springtime patriot to say let’s not take that at face value until we know all the facts.
- JS Mill - Friday, Aug 20, 21 @ 11:12 am:
=What percentage of the 1970 budget went towards pensions and what is that percentage today?=
Try Google. Make sure you separate out the legacy debt from the actual pensions costs.
=but we cannot know if it was really a win=
Umm, yes you can. More is better. 10 billion is a win. no matter what. I do not need comparative analysis to determine if 23% net of costs and an increase of $10 billion in assets is a… win.
If the Sox win the world series, but not by as many games as the 1923 Yankees is it really a win?
Sheesh, take the W.
- Oswego Willy - Friday, Aug 20, 21 @ 11:15 am:
=== Sheesh, take the W.===
After the Exodus disaster of messaging, you’d think taking a win here would be easy.
If you can’t take good news as such…
- Cool Papa Bell - Friday, Aug 20, 21 @ 11:49 am:
@Phenomynous
Please share that one with the group.
- Cool Papa Bell - Friday, Aug 20, 21 @ 11:52 am:
==Just wait till the new actuary report in a year or two when life expectance has wiped out billions in liability.==
Life expectancy dropped in this county last year and will be down again this year.
Per CDC:
Life expectancy at birth for males was 75.1 years in the first half of 2020, representing a decline of 1.2 years from 76.3 years in 2019. For females, life expectancy declined to 80.5 years, decreasing 0.9 year from 81.4 years in 2019
- City Zen - Friday, Aug 20, 21 @ 11:59 am:
Phenomynous - Don’t forget the fiscal year ends June 30.
Upon using the Google, a number of pension systems are reporting great returns. High-fives all around.
“Maryland’s $68B pension fund reports best performance in 35 years” 27%
“New Mexico Pension Posts Highest Returns in 36 Years” 29%
“N.J. public-worker pension fund reports hefty returns” 25% through May
- Oswego Willy - Friday, Aug 20, 21 @ 12:01 pm:
=== Upon using the Google===
Hit that Google key again and find the answer to the other thingy you wanted answered
- Anyone Remember - Friday, Aug 20, 21 @ 1:36 pm:
===Life expectancy dropped in this county last year and will be down again this year.===
[Sarcasm font on] Don’t worry, GASB will release another Accounting Standard that will more than offset any “gain” from that change in life expectancy.
- Enviro - Friday, Aug 20, 21 @ 3:25 pm:
=”Until you sell that asset and put the money in the bank, you got nothing but some ink on a scrap of paper”=
This is how people think when they sell assets too soon, then watch while the market continues to reach new all time highs.
- Steve Polite - Friday, Aug 20, 21 @ 3:47 pm:
“Until you sell that asset and put the money in the bank, you got nothing but some ink on a scrap of paper”
That goes for both losses and gains. It’s not a realized loss or gain until the financial instruments are sold.
- A - Friday, Aug 20, 21 @ 4:01 pm:
Is there something wrong with increased assets in TRS? Is there some way for “the taxpayers” to be happy or is it preferable to always be moaning and dumping on teachers and retired teachers? Ah, that dumping must be what makes some happy.
- Rich Miller - Friday, Aug 20, 21 @ 4:04 pm:
===or is it preferable to always be moaning===
Old habits die hard.