Allegheny County’s mid-year pension performance

Allegheny County’s mid-year pension performance

At the most recent meeting of Allegheny County’s pension board the members received the investment report for the period ending June 30, 2018.  The report shows that the total fund composite of investments stood at $915.5 million.  That is an increase from $894.1 million on June 30, 2017.  It is slight decrease from the $922 million reported in March.

The largest class of investments for the county are in public equities–U.S., non-U.S. and global–with just about 40 percent of the fund composite invested in these categories.  The remainder is divided between private equity, fixed-income, private real estate, public real assets, hedge funds and cash.  From June to June, the market value of total fixed-income, total private real estate and total public real assets increased in value while the other categories fell.

That is similar to the investment makeup of the City of Pittsburgh’s comprehensive pension trust fund that we wrote about earlier in 2018.  Whereas Pittsburgh’s pension ratio had a substantial upswing due to its pledge of parking taxes to the pension plans ($735 million in total annual payments through 2041) the county has not taken a similar action of that magnitude.

While we have made the recommendation that new public sector hires be placed into defined contribution plans, the reforms that were made by the county five years ago was to make changes to final average salary, overtime calculations, vesting period and length of service time in order to try and achieve savings.  The most recent valuation for the pension system was 55 percent funded with $1.555 billion in liabilities and $857 million in assets.