The Wisconsin public pension system rode the wave of rising equity markets last year to post a gain of 13.5 percent in its main investment fund while beating the benchmarks it set for itself.
The state’s retirement system, considered one of the healthiest in the nation, saw returns of 35.4 percent on its U.S. equity investments, according to preliminary data released by the State of Wisconsin Investment Board, which manages the funds.
The system’s largest component, the Core Fund, had assets of $86.5 billion at the end of 2013. The 13.5 percent return surpassed the benchmark of 12.9 percent the board had set.
The smaller Variable Fund, with assets of $7.2 billion, had gains of 29 percent last year, exceeding the board’s 28 percent benchmark.
The Core Fund’s investments are split evenly between U.S. and international stocks, with other types of instruments included for diversification. The Variable Fund is more heavily invested in U.S. stocks, with 70 percent deployed that way.
“The Core Fund’s performance was strong in terms of total return and performing better than its market benchmarks. As a result of strong internal investment management and the careful selection of outside managers, [the board] added more than $2.4 billion in added value over the past five years,” said Michael Williamson, the board’s executive director, in a release.
The pension funds have posted investment gains in four of the last five years, the board said, erasing the losses incurred during the Great Recession. For 2014, contribution levels and benefit levels will rise, the board said.
A 2012 Pew study of state pension funds found Wisconsin’s pension fund fully funded as of the end of 2010. Total assets under management by the investment board totaled about $101 billion at the end of last year. The system covers 579,000 current and retired state employees.