Iowa’s public pension fund drops 3.9% in fiscal 2022

The Iowa Public Employees Retirement System investment portfolio shed 3.90% for the year ending June 30, as the value of its trust fund assets fell $2.72 billion to $40.13 billion. Despite the loss, the pension fund beat its benchmark by 15 basis points.

“IPERS is never satisfied with a year of negative returns,” IPERS CEO Greg Samorajski said in a statement. “Nevertheless, this year’s results are understandable given the factors that continue to challenge all investors. These include record inflation, ongoing turmoil in Europe, rising interest rates and a sharp decline in global equity and fixed income markets.

Samorajski said IPERS performed better in its investments in real estate, private equity, private fixed income and absolute return.

The pension fund reported three-, five-, 10-, 20- and 30-year annualized returns of 8.80%, 8.55%, 8.60%, 7.96% and 8.52%, respectively. The portfolio’s benchmark posted returns of 8.72%, 8.51%, 8.56%, 8.10% and 8.28% over the same periods. IPERS’ assumed annual rate of return is 7.00%.

For the quarter ending June 30, IPERS’ investment portfolio lost 7.53% net of fees. During the quarter, domestic equities were the worst performing asset class, losing 16%, followed by international equities and global smart equities, which lost 13.32% and 12.88%, respectively. Investments in public credit fell 10.05%, while core fixed income plus securities fell 5.78%.

The losses were somewhat offset by the fund’s private real assets, which returned 8.19%, while cash and private credit returned the portfolio 5.02% and 1.33%, respectively. All other asset classes recorded losses for the quarter.

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Tags: FY2022, Greg Samorajski, Iowa Public Employees’ Retirement System, IPERS

Dolores W. Simon