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State of W.Va.'s pension fund investments grow $1.37 billion

CHARLESTON, W.Va. -- A strong stock market helped the West Virginia Investment Management Board grow the state's asset portfolio by more than $1.3 billion during the 2012-13 budget year, financial records show.As of June 30, the board had total assets of $14.54 billion, up $1.37 billion from June 30, 2012.A fiscal 2013 investment performance review released earlier this month by Strategic Investment Solutions of San Francisco shows that assets in state pension funds -- which account for 79 percent of all state investment assets -- grew by 12.8 percent for the budget year.Kristy Watson, chief investment officer for the Investment Management Board, said Monday the earnings were "buoyed by strong U.S. equity returns of 21 percent for the fiscal year.""Importantly, the pension plans' 10-year average annual return is approximately 7.5 percent -- right on target with the assumed actuarial return used for those plans by the Consolidated Public Retirement Board in achieving funded status," she added.Under legislation to fully fund pension plans for state and public school employees, pension plan assets have to grow by 7.5 percent a year or the Legislature has to make up the difference using state general revenue funds.
The largest state pension plan, the Teachers' Retirement System, grew by $733 million in fiscal 2013, to $5.7 billion. The Public Employees' Retirement System grew $482 million to $5.7 billion.While the market was good for stocks, fixed-income securities took a hit in the 2012-13 budget year.That resulted in about an $11 million "paper" loss in the state's Rainy Day A fund, which contains about $446 million set aside in the event a major natural or economic disaster hit the state."These recent negative returns have been primarily driven by mounting anxiety and uncertainty among fixed income investors that are anticipating inflation and rising interest rates as the economy continues to show evidence of strength and heating up," Watson said.While prices have dropped recently, Watson last week told the legislative Joint Committee on Government and Finance that the state is not at risk of losing money so long as it does not sell the securities prior to their maturity dates.Reach Phil Kabler at philk@wvgazette.com or 304-348-1220.
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