FY 2025 Investment Returns Exceed Assumed Rates of Return

FRANKFORT, KY – The Kentucky Public Pensions Authority (KPPA) announced the following investment returns for the County Employees Retirement System (CERS), the Kentucky Employees Retirement System (KERS), and the State Police Retirement System (SPRS) for the fiscal year (FY) ended June 30, 2025. All returns are net of fees and expenses.

Pension

Insurance

Portfolio performance bested the median return of 10.2% for public pension plans with more than $1 billion in assets as tracked by Wilshire Associates.

All pension and insurance portfolios returned significantly more than their actuarial assumed rates of return, which are 6.5% for all CERS pension and insurance portfolios and the KERS and SPRS insurance trusts, 6.25% for the KERS Hazardous pension portfolio, and 5.25% for the KERS Nonhazardous and SPRS pension portfolios.

“Despite market volatility and economic uncertainty our disciplined long-term investment strategy, focus on diversification and the skill of our investment team continued to produce strong relative and risk adjusted performance for the systems and beneficiaries,” said KPPA Chief Investment Officer Steve Willer. “All of the funds exceeded their actuarial assumed rates and outperformed their composite benchmarks.”

This is the third year in a row that CERS and KRS pension and insurance portfolio net returns have neared or exceeded 10%.

Over 10-, 20-, and 30-year periods, all system pension and insurance portfolio net returns have exceeded their actuarial assumed rates of return, and either nearly met or exceeded their benchmarks.

Considering the level of risk in each portfolio, all system pension and insurance portfolios are in the top 5% of peer public pension funds in terms of Sharpe ratio over the most recent one-, three-, and five-year periods. The Sharpe ratio measures how much investment return a portfolio earns compared to how much risk is in the portfolio.

Along with General Fund appropriations authorized by the Legislature and employer contributions, net investment returns contributed to a $3 billion increase in the market value of all pension and insurance funds during FY 2025. Total assets by market value stood at $29.8 billion as of June 30, compared with $26.8 billion as of the same date in 2024.

Every year, KPPA pays more than $2 billion in ongoing pension benefits, with 93% of that money going to Kentucky residents. Every dollar in benefits paid ultimately supports $1.26 in total output in the state, making state and local government retirement benefits an important economic driver for the Commonwealth.

For more detailed information about FY 2025 returns, including breakouts of individual CERS, KERS, and SPRS funds and asset classes, please visit the Monthly Performance Reports page in the Investments section of KPPA’s website. For more in-depth analysis, including performance attribution, economic conditions, and risk and return versus peers, please see the August 20, 2025 KRS Investment Committee materials and the August 27, 2025 CERS Investment Committee materials in KPPA’s About section on the website under Board Committees. For further information about individual asset classes, consult each system’s Investment Policy Statement. For more information about the systems’ investments generally, visit the Investments section of our website.

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The Kentucky Public Pensions Authority is responsible for the investment of funds and administration of pension and health insurance benefits for more than 444,000 members, including active and retired state and local government employees, state police officers, and nonteaching staff of local school boards and regional universities. Based on current assumptions, the systems’ actuary projects that all pension and insurance funds will be fully funded by Fiscal Year 2049.

Visit our website at https://kyret.ky.gov