SERS Investment Results for 2017

SERS Investment Results for 2017

The 2017 Comprehensive Annual Financial Report for the State Employees Retirement System (SERS) shows that the System had quite a good year in terms of investment performance.  The net appreciation in the value of investments grew $3.7 billion last year.  The previous twelve months of 2016 the net appreciation was $1.2 billion.  In 2017 the percentage share of investment growth was 88% of the increase in all investing activities income (interest, dividends, real estate, and miscellaneous income).  The year end 2017 balance of the plan overall was $29 billion.

On an actuarial basis, the funded ratio (assets divided by liabilities) was 59.4% with $19.6 billion in unfunded actuarial liabilities.  That’s a slight increase over 2016 and 2015 (58.1% and 58%, respectively).

Over half of SERS active employees (just over 102k) come from five departments/agencies: Human Services, Corrections, Transportation, State Police, and Penn State University.

In a few months new hires that begin joining SERS (on or after January 1, 2019) will choose between one of three pension plans (two hybrid defined benefit/defined contribution and one defined contribution) under the change to SERS (and PSERS) pension benefits last year.  The 2017 Report contains a projection that in 2027 the employer contribution rate for the plan will have fallen to 25.7% (from 32% in 2018) and the funded ratio of the plan will stand at 75.9%.