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Chicago Teachers' Pension Fund Reports Strong Investment Returns for 2014 Fiscal Year

- CTPF holds more than $10 billion in assets as of June 30, 2014 -

CHICAGO, Aug. 14, 2014 /PRNewswire/ -- The Chicago Teachers' Pension Fund (CTPF) reports a preliminary return on investments of 18.35 percent at the close of the fiscal year on June 30, 2014 – more than double the plan's assumed rate of return of 7.75 percent.

As a long-term investor, the plan's investment returns are more significant over longer periods. Over the past 35 years, the plan's compound rate of return has been 9.13 percent, which is 17.8 percent more than the plan's assumed rate of return.

CTPF currently holds approximately $10.8 billion in assets on behalf of its 63,000 active and retired educators. This is a more than 11 percent increase from $9.7 billion as of June 30, 2013.

"CTPF is a well-managed plan, and our 2014 performance demonstrates the success of our long-term strategy to manage a diverse portfolio with sound investments," said Jay C. Rehak, CTPF interim executive director and president of the board of trustees. "Our strong market performance is good news for our members and taxpayers who support our plan."

CTPF is a public employee retirement system established by the state of Illinois to provide annuity, disability, survivor, death and health benefits for certain certified teachers and other employees of the Chicago Public Schools (CPS) and approved city of Chicago charter schools. As fiduciaries to the Fund, the board of trustees has approved an asset allocation with policy targets designed to obtain the highest return on investments consistent with an appropriate level of risk for a large public employee retirement system.

CTPF maintains a highly diversified portfolio of investments, which includes global equities (public and private), global fixed income, real estate (public and private) and other real assets.  This asset allocation provides risk-adjusted returns while allowing the plan to "ride out" short-term fluctuations in individual asset classes.

CTPF receives funding from three major sources: its primary employer (CPS), employees and investment returns. The state of Illinois also contributes.

"These strong investment returns contribute to CTPF's improving financial picture. Even though the markets have been very volatile over the last few years, our diverse and long-term focused portfolio has helped us recover from the precipitous market fall and global financial crisis," said Rehak. "In June, CPS resumed making its full required payment, and earlier in the year, the state of Illinois restored its modest funding to CTPF. We appreciate the support from our employer and the state and will continue our responsible investment strategy to increase the financial stability of the plan."

CTPF's pension payments to retirees support the Illinois economy. Eighty-four percent of CTPF's 26,000 retirees stay in Illinois, and 50 percent of these beneficiaries live in Chicago. In 2013, CTPF distributed more than $1.07 billion to retirees in Illinois – including $548 million in Chicago alone. These pension payments have helped create more than 11,655 jobs in Illinois – including nearly 6,000 jobs in Chicago.

Despite CTPF's strong investment returns, the plan has suffered from lack of contributions from its employer and the state of Illinois. Its funding ratio is currently 49.5 percent.

Established by the Illinois state legislature in 1895, the Chicago Teachers' Pension Fund manages members' assets and administers benefits. The $9.7 billion pension fund serves approximately 63,000 active and retired educators, and provides pension and health insurance benefits to more than 26,000 beneficiaries.

SOURCE Chicago Teachers' Pension Fund (CTPF)

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