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Strong stock market drives Minnesota public-pension-fund gains of 18.6% in fiscal year

Minnesota’s three big public pension systems showed gains of 18.6 percent for the fiscal year ending June 30, and now have assets of $49.2 billion.

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That’s from the preliminary report that shows the investment returns from the State Board of Investment, which manages funds for the systems: the Public Employees Retirement Association (PERA), Minnesota State Retirement System (MSRS), and the Teachers Retirement Association (TRA).

The annual gains report comes on the heels of a critical report last week from the Center of the American Experiment, which said major changes are needed to fully fund the pension systems, including switching new state employees to defined contribution plans, or 401ks plans.

The pension funds responded that unfunded liabilities in the plans have been dropping and they are making good progress in fulling funding the plans.

The preliminary fiscal year numbers, which must still be audited, show the three funds assets grew by $6.1 billion, officials said.

Pension reform legislation in recent years has added to the improvement in the funds’ results; so has the stock market surge.

“Some public pension critics assert that state and local governments inflate investment return expectations to make them seem better funded than they are,” said Laurie Hacking, executive director of TRA. “Minnesota’s investments have far outperformed our 8.5 percent long-term target for the past 30 years.”

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