AIC Pensions Report 2020

The American Investment Council released its annual Public Pension Study, which examines the investments and returns of America’s largest public pension funds. Private equity was once again the best performing asset class for public pensions, delivering a median annualized return of 13.7 percent over a 10-year period.

Top 10 pension plans in America ranked by private equity returns:

  1. Illinois State Board of Investment — 16.70%

  2. Massachusetts Pension Reserves Investment Trust — 16.40%

  3. Iowa Public Employees’ Retirement System — 16.18%

  4. Public School and Education Employee Retirement Systems of Missouri — 16.00%

  5. Minnesota State Board of Investment — 15.90%

  6. Kentucky Retirement System Insurance Fund — 15.61%

  7. San Francisco Employees’ Retirement System — 15.54%

  8. Public Safety Personnel Retirement System of Arizona — 15.44%

  9. Ohio School Employees Retirement System — 15.40%

  10. State of Michigan Retirement Systems — 15.40%

Public pension funds aim to provide a secure retirement for civil servants, including teachers, firefighters, sanitation workers, bus drivers, and doctors and nurses in public hospitals. The AIC study examined 176 U.S public pension funds, which represent more than 30 million public sector workers and retirees. 85% trusted private equity with their members’ retirement savings.

The Illinois State Board of Investment had the best performing private equity portfolio, earning a 16.70 percent annualized return for public servants in the Land of Lincoln, net of fees.

The Massachusetts Pension Reserves Investment Trust, Iowa’s Public Employees’ Retirement System, and the Public School and Education Employee Retirement Systems of Missouri rounded out the top four, all delivering returns of at least 16% net of fees.

Drew Maloney, President and CEO of The American Investment Council, released the following statement:

Public pensions represent a basic promise and a sacred trust to our essential government workers. Even as they themselves face personal hardships and uncertainties, civil servants continue to provide vital services during these unsettling times. Private equity plays an important role in making sure we keep our promises to public employees, providing long-term retirement security by delivering strong returns for public pensions year after year.