Falling market Hawaii's state pension fund, continuing to shrink in the wake of a nearly 3-year-old bear market, lost 9.8 percent, or $747 million, on its investments in the recently concluded quarter as its total assets fell to $7.1 billion.
pummels Hawaii
state pension fund
The nearly 10 percent drop in
investment value, however, still
beats more than half of large fundsBy Dave Segal
dsegal@starbulletin.comDespite the downturn, though, the fund outperformed 51 percent of other large public funds and easily beat the 10.4 percent negative return of its benchmark.
Employees' Retirement System fund investment adviser Callan Associates said in a letter to the ERS trustees that funding levels for pension funds are estimated to be just as bad as they were in 1974 when investors experienced the last major bear market. The fund was down 13.1 percent through the first nine months of this calendar year.
"The only good news," Callan said, "is that stock markets have rebounded significantly since the end of the quarter."
The ERS fund, which provides retirement, disability and survivor benefits for 96,000 city, county and state employees, retirees and their beneficiaries, had $9.9 billion in assets on June 30, 2000, at the end of that fiscal year; $9 billion on June 30, 2001; and $7.9 billion on June 30, 2002.
This quarter's $830 million decline in assets includes benefit payouts and employee and employer contributions. A breakout of those numbers will be available later today.
"We're not happy with the results, but the fund has been beating our benchmark," ERS Administrator David Shimabukuro said. "Everyone's sinking," he added. "But we still have outperformed 51 percent of other large pension funds."
Shimabukuro also pointed out that despite the bear market, the ERS fund's annualized return is 6.83 percent for 10 years, 7.28 percent for 15 years and 9.42 percent for 20 years.