State Pension Fund Investment Rankings 2013

As a follow up to my previous post on September 22, I've ranked our US states by pension fund investment returns.  I found 1-year investment returns for 47 of 50 state pension funds and ranked them as of June 30, 2013.  

In the table below, you can click on the state abbreviation to link to the pension fund website. You can also click on the return figure to reach the source document for the reported returns. 

Rank	State	Return
1	SD	19.5%
2	AR	15.6%
3	NH	14.5%
4	MN	14.2%
5	KS	14.0%
6	OH	13.7%
7	ND	13.5%
8	MS	13.4%
9	GA	13.3%
10	NM	13.3%
11	IL	13.2%
12	FL	13.1%
13	AZ	13.1%
14	MT	13.0%
15	WV	12.8%
16	MA	12.7%
17	NE	12.7%
18	OR	12.7%
19	LA	12.6%
20	MO	12.6%
21	CA	12.5%
22	NV	12.4%
23	WA	12.4%
24	NY	12.3%
25	MI	12.2%
26	HI	12.0%
27	OK	12.0%
28	VA	11.8%
29	NJ	11.8%
30	CT	11.5%
31	WI	11.2%
32	DE	11.1%
33	ME	11.1%
34	RI	11.1%
35	KY	11.0%
36	AK	10.9%
37	CO	10.6%
38	MD	10.6%
39	TX	10.2%
40	IA	10.1%
41	SC	10.0%
42	TN	9.9%
43	NC	9.5%
44	ID	9.1%
45	VT	8.8%
46	PA	8.0%
47	IN	6.0%

Returns for Alabama, Utah, and Wyoming were no where to be found. 

North Carolina's returns are down right dismal, again.  You might recall that North Carolina ranked very low when I did a similar analysis for 2011.  This year North Carolina's investment returns rank just 43rd out of 47 states that have reported annual returns as of June 30, 2013.  (Note: June 30th is the most common fiscal year end for state pension funds).

You may notice that Indiana ranked last in the table above.  North Carolina hired two of Indiana's former Chief Investment Officers back-to-back.  The damage done to Indiana's pension fund has been repeated in North Carolina (damage = increasing alternative investments).   

If you live in North Carolina, you might notice that many states provide much more detailed information about their pension fund than North Carolina.  Many states report investment returns for each and every external manager as well as fees paid to each manager (North Carolina used to, but has not under current treasurer Janet Cowell). Also, many states report returns more frequently and more promptly than North Carolina.

While North Carolina's returns are among the worst in the country, one would not know it by reading the treasurer's press release regarding the returns.  The treasurer's press release did not point out that our 2013 returns of 9.5% lagged the average public pension return of 12.6%. This 3.1% underperformance has cost North Carolina $2.5 billion this past fiscal year.  

You might also notice the press release brags about "beating the market benchmark."  I'm not certain what North Carolina's "market benchmark" is exactly (its composition changes almost every year), but I do know that only one state in the country compares themselves to a lower "benchmark."  North Carolina's benchmark return was just 8.1% while the average benchmark of the states above was 11.0%.  Perhaps North Carolina should aim higher?