For the most recent year, the pension fund's negative return reflected a challenging market environment. For the year ended Dec. 31, the Russell 3000 index and Bloomberg U.S. Aggregate Bond index returned -19.2% and -13%, respectively.
The negative performance also brought the pension fund's assets down to $3.2 billion from $4.3 billion a year earlier. According to its most recent actuarial valuation, the pension fund had a funding ratio of 23.4% as of Dec. 31, 2021. In its report, actuary Segal Group said the pension fund remains at risk of having to liquidate investments in order to pay benefits, and "future unfavorable investment performance could lead to the fund not meeting its financial objectives."
By asset class for the most recent fiscal year, the top performer was real assets, which returned a net 3.6% (below its benchmark of 5.7%), followed by fixed income at -8.1% (above its -9.5% benchmark); global low volatility assets, -8.6% (-10.3%); hedge funds, -9.1% (-3.2%); domestic equities, -19.3% (-18.4%); and international equities, -21.4% (-16.6%).
As of Dec. 31, the actual allocation was 24.8% domestic equities , 24% fixed income, 16.1% international equities, 13.3% real assets, 11.5% hedge funds, 3.9% cash, 3.6% global low volatility, 2.3% private equity and the rest in private debt.
