“Those were the right calls to make,” Schloss said by telephone. “This was the year to be in U.S. equities.”
Above Target
The city’s retirement system, which had a funded ratio of 60 percent in June 2010, has an estimated annualized 10-year return of 7.5 percent, a half-percentage point more than the 7 percent target.
The median 10-year return for public pensions was 6.9 percent, according to Wilshire.
“Over time you should be able to get to 7 percent,” said Schloss.
Maryland’s $40.3 billion pension returned 10.6 percent for fiscal 2013, trailing the median for all state and local plans. The Free State allocated about 42 percent of its portfolio to stocks and plans to lower that ratio to 35 percent, said Robert Burd, deputy chief investment officer.
The state is reducing the potential for bigger returns in order to minimize wide swings in the value of its assets.
“We saw what happens when you have a reliance on public equity,” said Burd, referring to market losses following the financial crisis. “Public equity is the most volatile asset class.”
Past Gains
The median public-pension gain was 1.4 percent in fiscal 2012 after a 21 percent surge in 2011 and a 12 percent increase in 2010, Wilshire figures show. The median loss was almost 17 percent in 2009.