The Retirement Systems of Alabama pension funds had “the best year ever,” officials said this week.
The Teachers’ Retirement System saw a 21% return on investments for the year that ended Sept. 30. That represents $5.7 billion in investment income, RSA Deputy Director of Investments Marc Green told the TRS board this week. That brings the pension fund at the end of the year to nearly $32.5 billion.
The Employees’ Retirement Fund board meets next week, but RSA published its returns, 21.21% for the year, in the latest Advisor, along with the Judicial Retirement Fund’s 22.21%.
RSA annualized investment returns for 1, 3, 5 and 10 years
Teachers’ Retirement System: 21%; 6%; 9.05%; 8%
Employees’ Retirement System: 21.21%; 5.97%; 9%; 8.07%
Judicial Retirement Fund: 22.21%; 6.05%; 9.17%; 8.7%
“This is the best year we’ve ever had,” David Bronner, RSA’s chief executive officer for more than 50 years, said.
Green said the 2024 performance puts RSA in the top 20th percentile of its peer group.
It’s still unclear what the record returns will mean for RSA’s funded liabilities ratio.
“These out-sized returns should have a significant and positive impact on the funding levels for RSA as the excess returns are recognized over the next five years in the actuarial valuations,” Neah Scott, legislative counsel for RSA, told ADN.
Alabama Daily News reported earlier this year the funded liabilities in ERS and TRS have decreased in the last year and RSA will be asking lawmakers for more state funding in fiscal 2026. In 2021 the Teachers’ Retirement System’s funded ratio was 70.7%; as of September 2023, it was 65.1%. For the state Employees’ Retirement System, the funded liability went from 62% in 2021 to 57% in the same period.
“Every excellent year helps and we’re grateful that they’ve had a good year,” Sen. Arthur Orr, R-Decatur, told Alabama Daily News on Wednesday. He’s chairman of the Senate education budget committee. “That will certainly help with unfunded liabilities in both pension plans.
“…We’re still in what I would define as a yellow zone regarding the funded ratios and the liabilities we have,” he said.