Ohio’s public pension systems lost money in 2018, returns show

Monday, July 15, 2019 @ 5:29 PM
By Laura A. Bischoff - Columbus Bureau

Each of Ohio’s five public pension systems, which serve nearly 1.9 million workers, retirees and beneficiaries, lost money on their investment portfolios in 2018, putting more pressure on the retirement systems.

The Ohio Highway Patrol Retirement System took a 4.73 percent hit, which is worse than its benchmark comparison did at a 3.51 percent loss.

RELATED: Ohio’s biggest public pension fund looking at benefit cuts

“As with the other systems, December 2018 was a difficult month, so the timing was not favorable to us,” said OHPRS Director Mark Atkeson.

The good news is that so far in 2019 the fund has rebounded, making a 10 percent gain and adding $68 million, he said.

The remaining funds beat their benchmarks but still suffered negative returns: Public Employees Retirement System, - 2.99 percent; Ohio Police & Fire Pension Fund, -1.78 percent; State Teachers Retirement System, - 1.75 percent; School Employees Retirement System, -1.28 percent.

The U.S.-China trade war was a catalyst for a fourth-quarter market downturn, and inconsistent messages from the Federal Reserve amplified other concerns in the market, according to RVK Inc., an investment consulting firm. RVK reported its analysis of the systems 2018 investment performance to the Ohio Retirement Study Council.

Collectively, the five funds have investment assets valued at more than $190 billion, spread out in stocks, bonds, real estate, cash, hedge funds and other investments. The systems each set an expected investment rate of return, ranging from 7.2 percent to 8 percent – targets they need to consistently average or beat over the long haul.

In recent years, the pension systems have scaled back benefits and retiree health care coverage in an effort to keep the funds on solid ground.

A lawsuit brought by journalist John Damschroder against OPERS and Glouston Capital Partners was recently settled through mediation and dismissed, according to the Ohio Supreme Court. When asked for a copy of the settlement agreement, OPERS spokesman Mike Pramik said the retirement system does not have a copy and is not a party to the settlement.

Damschroder was seeking financial information about OPERS contracts with hedge, private equity and real estate investment managers. OPERS redacted information from the documents, which prompted Damschroder to file suit.