September 12, 2023
Public Safety Personnel Retirement System
State of Arizona
FOR IMMEDIATE RELEASE
Contact: Christian Palmer
PSPRS investments generate $1.4 billion in value for trust
7.6 percent net-of-fee returns in FY2023 exceeds assumed rate of return
ARIZONA – Investments managed by the Public Safety Personnel Retirement System produced more than $1.4 billion in value during the 2023 fiscal year for the state pension system serving nearly 60,000 firefighters, police officers, corrections officers, judges and elected officials.
Trust investments generated a 7.6 percent net of fee return due to the strong performance of domestic and international stocks, which produced 18.9 and 12.9 percent returns, respectively. The growth in assets, which included $500 million of additional employer contributions to pay down unfunded pension liabilities, pushed the PSPRS trust to a record balance of $19.5 billion by the June 30, 2023, end of the fiscal year.
“The PSPRS investment team continues to produce for its members, retirees, and employers while keeping risk in check,” said Trustee Harry Papp, chairman of the PSPRS Investment Committee. “We’re pleased to see the trust’s investment returns exceed our assumptions as this will have a positive impact on employer funding status and contribution rates.”
The 7.6 percent net of fee returns helped all measured timeframe performance exceed or meet the PSPRS Board of Trustees’ assumed rate of return of 7.2 percent. Net of fee returns for the three-year, five-year, seven-year and 10-year periods were 10.3, 7.2, 7.8 and 7.2 percent, respectively. Gross of fee returns for the 2023 fiscal year were 7.9 percent.
The 2023 fiscal year featured a rebound for domestic and international stock indexes that posted double-digit losses in the prior fiscal year. Conversely, investments in private market assets, notably private equity and private credit, underperformed after years of exceeding benchmarks.
“We’ve been very careful with investing the proceeds of the employer pension debt contributions and the returns were productive from both a short and long-term perspective,” said PSPRS Chief Investment Officer Mark Steed. “The investment team and consultants deserve credit for their performance in carrying out the investment policies of the Board of Trustees.”
Employer valuations for the fiscal year ending June 30, 2023, and the system’s consolidated annual reports for the public safety, corrections and elected officials plans will be completed and published before the end of the calendar year.