The Virginia Retirement System has recovered most of the losses it experienced during the 2008-2009 stock market crash, reaching $54.3 billion in assets as of March 31 after a 13% gain in its investment portfolio over the previous year, reports the Joint Legislative Audit & Review Commission in the draft of a semi-annual oversight report.
While the fund has under-performed 3- and 5-year benchmarks, due mainly to the stock market crash of 2008 and 2009, it has earned a compounded return of 5.9% over the last 10 years. The annualized return from 1990 to the present was 8.5%. (Click on graph for more legible image.)
The board uses a 7% ROI investment in its actuarial projections for long-term performance. The state assumes an 8% return.
But an improving performance doesn’t let the state or state employees off the hook for making up unfunded liabilities. “You can’t invest your way out of these unfunded liabilities,” said Diana F. Cantor, chair of the VRS board of trustees, after a briefing of state legislators Monday. (See the Times-Dispatch report.)
State contributions this year are significantly lower than called for by sound actuarial practice, but the state will make up the difference for this year and last, about $620 million, with interest in future budgets.
