The Wisconsin Retirement System funds — the source of pensions for nearly 198,000 retired public employees — brought in double-digit earnings in 2017, according to initial results announced Wednesday by the State of Wisconsin Investment Board.
The Core Fund closed the year with a preliminary return of 16.2 percent, the highest since 2009. The Core Fund is the Wisconsin Retirement System’s main trust fund, with diversified holdings. Its preliminary market value was $100.6 billion on Dec. 31, 2017.
The optional, all-stock Variable Fund ended 2017 with preliminary earnings of 23.2 percent, the best since 2013, and stood at $8.2 billion as of Dec. 31, 2017.
The returns represent changes in the value of the securities themselves, plus dividends, distributions and capital gains.
“Designed to weather a variety of economic environments, our strategy continues to deliver the returns needed to keep the retirement system strong over the long-term,” SWIB executive director Michael Williamson said.
Both funds outperformed market returns that are considered benchmarks for the Wisconsin Retirement System’s funds.
Nationwide, the major U.S. stock indexes all had a strong year in 2017.
The Standard & Poor’s 500 climbed 19.4 percent; the Dow Jones industrial average ended the year 25.1 percent higher; and the Nasdaq rose 28.2 percent.
While those results skew higher than those of the Wisconsin Retirement System, the benchmarks for the WRS also include the earnings of bonds and other types of investments, more closely reflecting the makeup of the WRS funds.
The state Department of Employee Trust Funds uses the results, along with an actuarial analysis, to calculate adjustments in the pension checks of retirees covered by the Wisconsin Retirement System. Core Fund returns are averaged over a five-year period.
Pension adjustments will be announced in March, and are expected to take effect in May.
In all, the Wisconsin Retirement System’s funds ended 2017 at $108.8 billion, up from $96.3 billion, a year earlier. More than 622,000 current and former public employees have accounts in the retirement system.