SD retirement system investments have risen in value
PIERRE -- The investment portfolio grew 13.6 percent in market value during the past nine months for the South Dakota Retirement System.
That came on the heels of a 19 percent gain in fiscal 2013.
But in reporting those results Thursday, state investment officer Matt Clark said he is deeply concerned about conditions in the national and world economies.
"It's good we didn't give back last year's return -- yet, at least," Clark told trustees for South Dakota's public pension system.
The system covers state government, state universities and those cities, counties, school districts and other special districts that choose to participate.
The system has been in and out of a deficit situation in the past decade as investment markets fell and rose twice.
As recently as June 30, 2012, the system was only 93 percent funded for its long-term needs. Last year the actuarial value got back to 100 percent and market value stood at 103 percent on June 30.
If the system finishes the 2014 fiscal year with at least 12.5 percent growth on June 30, the system will remain fully funded for the long term, and have a market value of 109 percent of what is necessary, according to the system's outside actuary consultant.
Clark and the state Investment Council generally take a contrarian approach, buying extra stock during difficult economic times and gradually selling off the extra as the markets climb beyond reasonable values.
"The altitude of the markets is high. The air is getting thin. The risk is getting elevated," Clark said. "The horrible always follows the great."
Clark said market volatility seems to be higher and higher. "I think what we've seen is what we're going to get," he said.
The SDRS portfolio is 73 percent invested in stocks and has been as high as 80 percent. Clark said he's still uncomfortable and foresees dropping to 70 percent.