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State Pension Assets Grew 19% in FY2021

We’re rich! our state investment honchos tell us again. After managing to keep us from losing our shirts in the brief pandemic crash of the stock market in spring 2020 and posting asset losses for Fiscal Year 2020 of 1.4%, our trusty state investors report  our South Dakota Retirement System assets grew 19% in FY2021 thank to returns of 22%.

Investments for the South Dakota Retirement System returned 22% for the year ending June 30, 2021, its trustees heard Thursday.

The worth rose to $14.6 billion, up from the 2020 finish of nearly $12.3 billion.

The large gain was much more than the 6.5% return necessary to keep the system in financial balance [Bob Mercer, “SDRS Investments Gained 22% for Year,” KELO-TV, 2021.09.02].

We could have seen returns of 28% if our state investors had rolled more dice into the stock market, but that’s not how our conservative chief investor Matt Clark plays the game:

There was a gray lining in the silver cloud. The capital-market benchmark was up 28%.

[Assistant investment officer Tammy] Otten said the under-performance resulted from a decision by the state Investment Councilto reduce risk because many stocks seemed over-valued.

The council went as high as 73% investments in stocks but then pulled back, finishing at 52.9% in stocks and 33% in cash.

That reflected the long-term contrarian investing approach of state investment officer Matt Clark. “I would do it the same way all over again,” he said [Mercer, 2021.09.02].

If having 19% more assets this year than last year is underperformance, then please, Mr. Clark, Ms. Otten, please underperform every year.

9 Comments

  1. Porter Lansing 2021-09-03

    Is it valid to feel proud about having money invested when teachers are woefully underpaid?

    I know it irritates me that my tax money is being sent to a state that won’t pay it’s own way, and thinks it’s unnecessary to do so.

  2. cibvet 2021-09-03

    Hopefully someone hires an independent firm to check the books so we don’t end up with a EB-5 fund where the money disappears never to be found.

  3. John Tsitrian 2021-09-03

    Reminder to the folks that run this state: The gains came in a market that D. Trump said would crash “like we’ve never seen before” if Biden gets elected. https://www.youtube.com/watch?v=q-XgyYqvFvQ

  4. Arlo Blundt 2021-09-03

    Well…the fact remains, that even crippled by Covid, natural disasters, and political insurrection, the US remains the economic powerhouse of the world…the dark side is, of course, that the “shorts” will have their day. They will cash in a some point…the market will tumble for a while….that’s the game. A contrarian approach for a state investment fund sounds good to me…but, like so many investors I’m a waif in the market, just trying to ride out the storm.

  5. Mark Anderson 2021-09-03

    This is the most important job in the state, how do they keep a politician from screwing it up?

  6. DaveFN 2021-09-03

    Porter Lansing

    It’s the way of South Dakota. Get teachers to effectively pay an annual front-end load for agreeing to work in the system (by paying them reduced wages), thereby also reducing the amount they pay into retirement and can thereby withdraw when they retire (effectively an annual back-end load). All with the promise of a solvent system to get them into the state system in the first place.

    Never pay people what they’re worth, and attract all the suckers you can get. Speaks well for those hired, doesn’t it? Not to mention those who hire…

    As far as the healthy investments the state makes off teachers who pay in to retirement and don’t get it back (pensions are not investment but pay-in dependent), just where does the excess go? Scuttlebutt is that it’s a cushion for lean years. I’m not so sure.

  7. grudznick 2021-09-04

    It seems, Mr. Tsitrian, that Mr. Trump was wrong again, grudznick is not shocked, nor should you be surprised. But keep looking for ways to bash that sad, sick fellow, Mr. Trump.

  8. grudznick 2021-09-04

    Mr. H, what has happened to your blogging place? Things are all moved around. Is this a response to Mr. PP’s new Dakota Political News place?

  9. Kent+Frerichs 2021-09-04

    The South Dakota Investment Council was formed during Dick Kneip’s administration. This concept came to fruition from a Democrat Governor and a Legislature that was nearly evenly divided: Democrat and Republican. This State Investment Office has earned hundreds of millions of dollars for South Dakota by wisely investing our state’s funds when not in use. This concept has been of great benefit to South Dakota citizens. Prior to the establishment of the State Investment Council, South Dakota’s funds were deposited in their favorite banks, earning very little interest. This is just one of several fiscally sound and citizen friendly programs that were enacted with a Democrat Governor and Democrat Legislators. Since this was started nearly four decades ago, many people need to be reminded: Democrats have great ideas and can work for the people!

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