Public Safety Personnel Retirement System
State of Arizona
FOR IMMEDIATE RELEASE
Contact: Christian Palmer
Phone: 602-296-3736
PSPRS investment returns push trust value to $21.8 billion
10.3 percent net-of-fee returns in FY2024 produces $2 billion
ARIZONA – Investments managed for the public safety, corrections and elected officials pension plans generated a 10.3 percent net-of-fee return during the fiscal year ending June 30, 2024.
The returns produced approximately $2.05 billion in value for the trust, serving nearly 60,000 firefighters, police officers, corrections officers, judges and elected officials. The final balance of the PSPRS trust at the end of the fiscal year was $21.8 billion, compared to $19.5 billion at the end of the 2023 fiscal year.
“The PSPRS investment team deserves credit for building a portfolio capable of producing strong returns and withstanding market volatility that can negatively impact employer contribution rates and taxpayers,” said PSPRS Administrator Mike Townsend. “We’re proud of the continued growth in assets while we provide earned and promised retirement benefits to our membership and survivors.”
The 10.3 percent return exceeds the system’s 7.2 percent assumed rate of return on both a one-year and seven-year timeframe, which helps raise plan funding levels and lower employer contribution rates.
Domestic and international stock markets produced high returns for the PSPRS portfolio, posting respective 22.9 and 11.77 percent gains during the 2024 fiscal year. Private lending investments generated a 10.9 percent return, while the trust also benefitted from increased investment in short-term treasury bills. For the second year in a row, investments in private market assets, notably private equity, underperformed due to the challenging high-interest rate environment.
“We’re pleased with the returns, which were largely carried by high stock market performance but tempered by alternative asset classes that are negatively impacted by high interest rates,” said Trustee Harry Papp, chairman of the PSPRS Investment Committee. “Generating more than 10 percent return while balancing risk is commendable on both short and long-term horizons.”
The PSPRS investment portfolio was more than 60 percent less volatile over the 2024 fiscal year than the performance of the Standard & Poor 500 index, which tracks the performance of the 500 largest companies on the U.S. stock market. Peer comparisons to PSPRS were also favorable, as trust investments ranked within the top 38th percentile over the year and in the top 30th percentile over the seven-year actuarial cycle.
“We’ve committed to managing plan funds responsibly, recognizing hidden market risks and being careful with deploying the billions of dollars that employers have contributed over the past several years to pay down their pension debts,” said PSPRS Chief Investment Officer Mark Steed. “Our focus is on achieving stable, long-term investment returns and retirement security for our members.”
Employer valuations for the fiscal year ending June 30, 2024, 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 2024.
PSPRS is governed by a nine-member Board of Trustees. To learn more about PSPRS investment strategies and pension financing please visit the PSPRS YouTube channel.