There’s a lot of movement in the stock market right now and the Indiana Public Retirement System (INPRS) wants you to understand what that means for you, your retirement, and your INPRS account.
- Markets don’t love uncertainty. When there are global issues at play, it’s common to see that reflected in market behavior. Recently, concerns regarding the coronavirus and other global issues have resulted in decreased stock market values.
- While these market changes are concerning, please know that 1977 Fund is a defined benefit (DB) retirement. The funds in the 1977 Fund investments are diversified and designed to target a long-term 6.75 percent return over 30 years.
- As part of that diversification, INPRS’s target investment allocation to public equities (the stock market) is just 22 percent with the remaining 78% of the funds in bonds, private equity, real estate and other investments.
- Events like the recent market swings are precisely why we are so diversified.
- The 1977 Fund was well funded before the market volatility caused by COVID-19 at 98.6% and still remains well funded.
- FY2020 investment return needs to be approximately 2.0% or greater to maintain that funded status
- Estimated FY2020 investment return as of April 30, 2020 = (-0.1%). Actuaries use 5-year smoothing so that any one year does not have an outsized impact on funded status or employer contributions.
- Funded status of ’77 Fund is much better than most public plans across the country (See Below).