Search

"The year ending June 30, 2015 was a difficult time period for so-called "risk assets." Following two fiscal years of robust, double-digit investment performance returns, the System's investment portfolio struggled to produce a single digit positive total return in fiscal year 2015. The year was characterized by global financial market volatility, with global equity and fixed income markets largely moving sideways, and US dollar strength reducing non-US return streams for US dollar based investors. Financial market volatility resulted from a variety of sources, including expectations of Federal Reserve "liftoff" in the US, concerns about slowing economic growth in China, dramatic declines in energy and other commodity prices, geopolitical strife (Russia; Ukraine; Islamic State terrorism), ECB monetary easing, and the Greek debt crisis."

"KPERS serves members as a fiduciary, holding assets in trust for them, growing those assets through investments and delivering promised benefits when the time comes. The fiduciary standard is our driving force, particularly in investments. It is the highest standard of care and accountability. KPERS investments are made and managed for the sole purpose of providing benefits to our members and their beneficiaries."

A set of 12 documents provided by the Kansas Board of Regents with resources and information on Mandatory and Volunteer Retirement Plans.

There has been considerable attention given in recent months to the shortfalls faced by state and local pension funds. Using the current methodology of assessing pension obligations, the shortfalls sum to nearly $1 trillion. Some analysts have argued that by using what they consider to be a more accurate methodology, the shortfalls could be more than three times this size. Based on these projections, many political figures have argued the need to drastically reduce the generosity of public sector pensions, and possibly to default on pension obligations already incurred. This paper shows: Most of the pension shortfall using the current methodology is attributable to the plunge in the stock market in the years 2007-2009. The argument that pension funds should only assume a risk-free rate of return in assessing pension fund adequacy ignores the distinction between governmental units, which need be little concerned over the timing of market fluctuations, and individual investors, who must be very sensitive to market timing. The size of the projected state and local government shortfalls measured as a share of future gross state products appear manageable.

The Joint Committee on KPERS Investment Practices was created by concurrent resolution of the 1991 Legislature to conduct an investigation into KPERS investments, to determine if there have been investment losses, determine what action might be appropriate to recover such losses and recommend legislation to prevent future losses.