TRA Investments Positive

Fund investment returns positive despite market turmoil

The TRA fund posted a 4.2 percent return on investments for fiscal year 2020, according to the Minnesota State Board of Investment (SBI). The year’s investment return fell short of the fund’s 7.5 percent target, but remained in positive territory despite a volatile period for the stock market.

Using this information, the TRA actuaries are estimating that the funded ratio as of June 30, 2020, using market value of assets, is 75.9 percent, down slightly from the previous year. Actuaries project that TRA will reach the 100 percent funded level in 2047, assuming that all actuarial assumptions are met.

Financial markets have experienced significant volatility since mid-February due to fears over the impact of the novel coronavirus (COVID-19). It is possible that the stock markets will continue to experience corrections as the impact of the virus plays out globally and domestically.

However, we assure you that your TRA retirement benefits remain secure.

The assets of Minnesota’s pension systems—TRA, PERA, and MSRS—are managed by professionals at the SBI. The SBI has developed an investment portfolio that is well-diversified among several asset classes and structured to weather stock market volatility. Our pension system investments have been impacted by stock market corrections, but the SBI is careful not to overreact to short-term market volatility. The TRA, through SBI, is a very long-term investor and we focus on portfolio risk and long-term returns. We are pleased to report that the SBI has achieved a return of 8.6 percent per year over the 30 years ended June 30, 2020.

Read more about Minnesota’s pension investments.