By Tom Latek
Kentucky Today
The Kentucky Public Pensions Authority (KPPA) announced this week that investment returns for the County Employees Retirement System (CERS), the Kentucky Employees Retirement System (KERS) and the State Police Retirement System (SPRS) exceeded assumed rates of return for the fiscal year (FY) ended June 30.
The rate of return on the five plans administered by the KPPA ranged from 11.0 percent to 11.9 percent for the pension portfolios, and from 11.2 percent to 11.8 percent on the insurance plans.
All pension and insurance portfolios returned significantly more than their actuarial assumed rates of return, which are 6.5 percent for all CERS pension and insurance portfolios and the KERS and SPRS insurance trusts, 6.25 percent for the KERS Hazardous pension portfolio, and 5.25 percent for the KERS Nonhazardous and SPRS pension portfolios.
“Despite market volatility and economic uncertainty, our disciplined long-term investment strategy, focus on diversification and the skill of our investment team continued to produce strong relative and risk adjusted performance for the systems and beneficiaries,” said KPPA Chief Investment Officer Steve Willer. “All of the funds exceeded their actuarial assumed rates and outperformed their composite benchmarks.”
This is the third year in a row that the pension and insurance portfolio net returns have neared or exceeded 10 percent.
Along with General Fund appropriations authorized by the legislature and employer contributions, net investment returns contributed to a $3 billion increase in the market value of all pension and insurance funds during FY 2025. Total assets by market value stood at $29.8 billion as of June 30, compared with $26.8 billion as of the same date in 2024.
Every year, KPPA pays over $2 billion in pension benefits, 93 percent of which goes to Kentucky residents. Every dollar in benefits ultimately supports $1.26 in total output in the state, making the government retirement benefits an important economic driver for Kentucky.
For more detailed information about FY 2025 returns, including breakouts of individual CERS, KERS, and SPRS funds and asset classes, please visit the Monthly Performance Reports page in the Investments section of KPPA’s website.
The KPPA administers pension and health insurance benefits for more than 444,000 members, including active and retired state and local government employees, state police officers, and nonteaching staff of local school boards and regional universities. The systems’ actuary projects that all pension and insurance funds will be fully funded by Fiscal Year 2049.