Risky Business: Pension Funds With Less Than Conservative Asset Allocations

When it comes to pension funds, most people hope their future retirement income will be managed in a conservative way. These 25 funds top the list of state funds with a "risky" investment strategy, meaning the lion's share of investments are not in fixed income or cash holdings.

Rank Fund name "Risky" share
1. Commonwealth of Pennsylvania State Employees' Retirement System
Harrisburg, Penn.
86.1%
 
Total assets (as of Sept. 30, 2008) $25.6 billion
"Risky" share 86.1%
Private equity 22.4%
Domestic stock 13.3%
International stock 13.0%
Real estate equity 7.5%
Other (ARS, inflation protection)29.9%
Domestic fixed income6.7%
International fixed income5.0%
Cash and equivalents2.2%
2. Massachusetts Pension Reserves Investment Management Board
Boston, Mass.
82.9%
 
Total assets (as of Sept. 30, 2008) $41.8 billion
"Risky" share 82.9%
Alternatives 11.7%
Private equity 9.1%
Real estate equity 7.3%
Other (Global equity, U.S. REITs, global REITs, international REITs)54.8%
Domestic fixed income13.9%
International fixed income3.1%
Cash and equivalents0.1%
3. Teacher Retirement System of Texas
Austin, Texas
82.0%
 
Total assets (as of Sept. 30, 2008) $91.4 billion
"Risky" share 82.0%
Domestic stock 30.0%
International stock 26.3%
Private equity 6.5%
Real estate equity 3.7%
Alternatives 4.0%
Other (TIPS, commodities, real assets)11.5%
Domestic fixed income15.1%
Cash and equivalents2.9%
4. Teachers' Retirement System of the State of Illinois
Springfield, Ill.
81.5%
 
Total assets (as of Sept. 30, 2008) $31.3 billion
"Risky" share 81.5%
Domestic stock 33.2%
International stock 20.7%
Real estate equity 10.6%
Private equity 7.7%
Other (Real return) 9.3%
International fixed income18.3%
Cash and equivalents0.2%
5. Louisiana Teachers' Retirement System
Baton Rouge, La.
81.0%
 
Total assets (as of Sept. 30, 2008) $11.8 billion
"Risky" share 81.0%
Domestic stock 32.0%
International stock 26.0%
Private equity 13.0%
Real estate equity 6.0%
Alternatives 4.0%
Domestic fixed income9.0%
International fixed income8.0%
Cash and equivalents2.0%
6. Alaska Retirement Management Board
Juneau, Alaska
80.6%
 
Total assets (as of Sept. 30, 2008) $16.5 billion
"Risky" share 80.6%
Domestic stock 32.8%
International stock 21.4%
Real estate equity 14.1%
Private equity 8.2%
Other (ARS) 4.1%
Domestic fixed income17.2%
International fixed income2.2%
7. Kansas Public Employees Retirement System
Topeka, Kan.
80.0%
 
Total assets (as of Sept. 30, 2008) $11.4 billion
"Risky" share 80.0%
Domestic stock 31.1%
International stock 30.3%
Real estate equity 3.9%
Private equity 3.3%
Other (Real return) 11.4%
Domestic fixed income 14.8%
Cash and equivalents 5.2%
8. Illinois State Board of Investment
Chicago, Ill.
78.2%
 
Total assets (as of Sept. 30, 2008) $11.9 billion
"Risky" share 78.2%
Domestic stock 31.6%
International stock 19.8%
Alternatives 12.9%
Real estate equity 9.2%
Private equity 4.7%
Domestic fixed income20.7%
Cash and equivalents1.1%
9. California State Teachers' Retirement System
West Sacramento, Calif.
78.0%
 
Total assets (as of Sept. 30, 2008) $130.5 billion
"Risky" share 78.0%
Domestic stock 37.0%
International stock 19.0%
Private equity 12.0%
Real estate equity 10.0%
Domestic fixed income21.0%
Cash and equivalents1.0%
10. State of Michigan Retirement Systems
East Lansing, Mich.
77.7%
 
Total assets (as of Sept. 30, 2008) $50.9 billion
"Risky" share 77.7%
Domestic stock 37.7%
Private equity 17.4%
International stock 12.7%
Real estate equity 9.9%
Domestic fixed income19.1%
Cash and equivalents3.2%
11. State Teachers' Retirement System of Ohio
Columbus, Ohio
77.6%
 
Total assets (as of Sept. 30, 2008) $58.2 billion
"Risky" share 77.6%
Domestic stock 39.9%
International stock 24.7%
Real estate equity 7.5%
Private equity 4.7%
Alternatives 0.8%
Domestic fixed income15.6%
Cash and equivalents6.0%
International fixed income0.8%
12. Washington State Investment Board
Olympia, Wash.
77.4%
 
Total assets (as of Sept. 30, 2008) $56.7 billion
"Risky" share 77.4%
Private equity 22.1%
International stock 22.0%
Domestic stock 16.2%
Real estate equity 15.2%
Alternatives 1.1%
Other (Tangible assets, global equity)0.9%
Domestic fixed income22.5%
Cash and equivalents0.1%
13. Missouri State Employees' Retirement System
Jefferson City, Mo.
76.1%
 
Total assets (as of Sept. 30, 2008) $8.1 billion
"Risky" share 76.1%
Private equity 8.9%
International stock 21.5%
Domestic stock 21.4%
Real estate equity 4.6%
Other (Distressed debt, commodities, timber)19.7%
Domestic fixed income23.9%
14. Public School Teachers' Pension & Retirement Fund of Chicago
Chicago, Ill.
75.8%
 
Total assets (as of Sept. 30, 2008) $9.2 billion
"Risky" share 75.8%
Domestic stock 42.6%
International stock 21.5%
Real estate equity 6.3%
Alternatives 4.0%
Private equity 2.8%
Domestic fixed income20.0%
Cash and equivalents4.2%
15. Minnesota State Board of Investment
St. Paul, Minn.
75.7%
 
Total assets (as of Sept. 30, 2008) $40.7 billion
"Risky" share 75.7%
Domestic stock 44.6%
International stock 16.3%
Private equity 10.9%
Real estate equity 2.7%
Alternatives 1.2%
Domestic fixed income22.3%
Cash and equivalents2.0%
16. Public Employees' Retirement Association of Colorado
Denver, Colo.
75.6%
 
Total assets (as of Sept. 30, 2008) $34.1 billion
"Risky" share 75.6%
Domestic stock 39.7%
International stock 18.5%
Private equity 9.0%
Real estate equity 6.8%
Alternatives 1.6%
Domestic fixed income21.6%
Cash and equivalents1.8%
International fixed income1.0%
17. Employees' Retirement System of Rhode Island
Providence, R.I.
75.4%
 
Total assets (as of Sept. 30, 2008) $6.8 billion
"Risky" share 75.4%
Domestic stock 41.8%
International stock 19.6%
Private equity 9.0%
Real estate equity 3.7%
Other 1.3%
Domestic fixed income24.4%
Cash and equivalents0.2%
18. South Dakota Investment Council
Pierre, S.D.
75.0%
 
Total assets (as of Sept. 30, 2008) $5.8 billion
"Risky" share 75.0%
Private equity 9.0%
Real estate equity 9.0%
Other (Arbitrage, global equity)57.0%
Domestic fixed income24.0%
Cash and equivalents1.0%
19.School Employees Retirement System of Ohio
Columbus, Ohio
75.0%
 
Total assets (as of Sept. 30, 2008) $9.1 billion
"Risky" share 75.0%
Domestic stock 31.0%
International stock 29.0%
Real estate equity 8.0%
Private equity 7.0%
Domestic fixed income24.0%
Cash and equivalents1.0%
20. Arizona State Retirement System
Phoenix, Ariz.
74.9%
 
Total assets (as of Sept. 30, 2008) $23.3 billion
"Risky" share 74.9%
Domestic stock 50.9%
International stock 16.8%
Real estate equity 3.0%
Private equity 1.3%
Other 2.9%
Domestic fixed income25.1%
21. Ohio Police & Fire Pension Fund
Columbus, Ohio
74.7%
 
Total assets (as of Sept. 30, 2008) $10.1 billion
"Risky" share 74.7%
Domestic stock 36.4%
International stock 23.2%
Real estate equity 6.9%
Private equity 3.2%
Other 5.0%
Domestic fixed income24.4%
Cash and equivalents0.9%
22. Sacramento County Employees' Retirement System
Sacramento, Calif.
74.6%
 
Total assets (as of Sept. 30, 2008) $5.7 billion
"Risky" share 74.6%
Domestic stock 33.9%
International stock 21.2%
Real estate equity 9.6%
Private equity 0.4%
Other (Hedge funds, opportunities)9.5%
Domestic fixed income19.4%
Cash and equivalents6.0%
23. Arkansas Teacher Retirement System
Little Rock, Ark.
74.4%
 
Total assets (as of Sept. 30, 2008) $9.7 billion
"Risky" share 74.4%
International stock 33.5%
Domestic stock 25.0%
Private equity 6.8%
Real estate equity 6.2%
Alternatives 2.9%
International fixed income25.4%
Cash and equivalents0.2%
23. New York State Teachers' Retirement System
Albany, N.Y.
74.4%
 
Total assets (as of Sept. 30, 2008) $77.6 billion
"Risky" share 74.4%
Domestic stock 47.4%
International stock 13.2%
Private equity 6.4%
Real estate equity 7.4%
Domestic fixed income24.6%
Cash and equivalents1.0%
25. Louisiana State Employees' Retirement System
Baton Rouge, La.
74.3%
 
Total assets (as of Sept. 30, 2008) $7.7 billion
"Risky" share 77.0%
Domestic stock 28.1%
International stock 23.4%
Alternatives 13.0%
Private equity 9.8%
Domestic fixed income20.0%
International fixed income4.7%
Cash and equivalents1.0%

Notes:

The "risky" investment calculation is based on a formula derived by Northwestern University finance professor Joshua Rauh. It consists of the combined percentages of all investment types listed, except fixed-income and cash.

Comments

 

Please keep your community civil. All comments must follow the NPR.org Community rules and terms of use, and will be moderated prior to posting. NPR reserves the right to use the comments we receive, in whole or in part, and to use the commenter's name and location, in any medium. See also the Terms of Use, Privacy Policy and Community FAQ.