LACERS BOARD UPDATE: LACERS Pension Investments Diverse With Long Term Focus


Michael Wilkinson, LACERS/Legal Representative

By Michael R. Wilkinson
LACERS/Legal Representative

First, a reminder: Ballots for the LACERS Retired member election must be received, not mailed, by April 21, 2020. If you have not voted yet, please send in your ballot.

A column on investment results is always dated news because it is prepared before the always-changing financial markets move up and down. Now this is especially true as we all follow the responses to the COVID-19 virus and the market reactions. That said, it is still useful to look back on LACERS performance for the time period ending Dec. 31, 2019 as reported by our investment consultant NEPC.

The total LACERS fund returned 17.88 percent for the year, 9.89 percent for 3 years, 7.37 percent for 5 years, and 8.77 percent for 10 years. For the multiyear returns, the figures are for the annual average return.

Let’s see how the various asset classes performed. As you know, LACERS diversifies its investments so that it doesn’t make a bet that one particular asset class will outperform all the time. History has shown that not all investment types move in lockstep, and a diversified investment strategy tends to perform better and reduce risk. It is typical that one year’s hot investment class will be a dog the next year.

I picked the three-year return result since it was the longest period in this report. U.S. equity returned 13.3 percent; non-U.S. equity, 10.67 percent; total fixed income, 4.67 percent; real assets, 5.60 percent, and private equity, 12.73 percent. The returns for non-U.S. equity, total fixed income and cash were above the returns of an index, while the other classes were below index returns.

A cautionary note: While it is always satisfying to report investment returns when the financial markets are pushing upward, your pension will be there for you in both up and down markets. So, if you wake up to the morning financial news reports and hear news of financial turmoil, remember that your pension plan is ready for whatever the markets dish out.

Opinions expressed in this column are those of the author and not necessarily those of Alive! or the Employees Club of California.