Police and Fire Retirement System investment performance for 2013 exceeds 89% of major U.S. public pension funds
DETROIT, March 6, 2014 /PRNewswire/ -- The Police and Fire Retirement System of the City of Detroit has outperformed 89% of the public pension plans with assets of more than $1 billion in the United States for calendar year 2013, earning 18.5 percent on its portfolio investments, it was announced today.
"You got everything out of 2013 that you could have expected to get out of your investments," said Bill Bensur, Managing Director of Wilshire Associates, in delivering its annual report to the PFRS Board of Trustees on Thursday. "It's important to take note of this impressive performance because we always tend to focus on the bad years."
The PFRS, which has assets of $3.3 billion as of December 31, 2013, generated an 18.5% return on its investments for the calendar year 2013, according to Wilshire Associates, the national investment advisor to the Police and Fire Retirement System. Wilshire, a nationally recognized investment advisor, reported to the Board that the PFRS earned $564 million in investment gains for calendar 2013, with investment gains of $181 million achieved in the fourth quarter.
The 2013 gross rate of return of 19.4 percent ranked in the 11th percentile in comparing the Police and Fire Retirement System with a universe of other public pension plans with assets of $1 billion or more. The PFRS' annual net rate of return for 2013 was 18.5%.
"This was a good return for the year, a pretty solid absolute return," said Nick Sefchok, a Wilshire analyst told the board.
The City of Detroit, which entered into bankruptcy in December 2013, has not made any of its financial obligation payments to the PFRS in more than a year.
Wilshire Associates was hired by the Board in 2012 to serve as its General Investment Consultant after a lengthy Request For Proposal process of national financial consultant firms.
"We think the results of performance for 2013 speaks to the management systems in place and to the quality of our own internal investment advisors and the national experts we have hired to advise the pension fund," said Cynthia Thomas, Executive Director of the Retirement Systems. "We continue to work on best practices and performance improvement of the system at all levels to maximize long term performance for our members and beneficiaries," she added.
Wilshire Associates was founded in 1972 and employs some 300 people world wide. The Pittsburgh-based firm has more than 120 clients and assets under advisement in excess of $700 billion. Approximately 45 of the firm's clients have single assets over $1 billion and they service numerous public pension plans.
The Police and Fire Retirement System of the City of Detroit was founded under City Charter and is the fiduciary for the pensions of all police and fire personnel. As of 2012 there are some 4,000 active members and more than 8,000 retirees in the system. The PFRS has assets of approximately $3.3 billion and is 96.1% funded for pension benefits. The PFRS is a separate entity from the city's General Retirement System. For more information please visit www.PFRSDetroit.org.
SOURCE Police and Fire Retirement System, City of Detroit