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FAQs - Investments FAQs - How are LASERS assets invested?
- What rate of return has LASERS investments achieved?
- How does the market affect my retirement benefit?
- What is LASERS target investment rate of return?
- What is the process for choosing LASERS investment managers?
- How is the asset allocation determined?
1. How are LASERS assets invested? LASERS assets are invested in diversified stock, bond, and alternative asset portfolios. See Asset Allocation for details.
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2. What rate of return has LASERS investments achieved? The Actuarial Value of LASERS investment yield was 5.43 percent for the fiscal year ending June 30, 2016. LASERS market investment rate of return for that period was -2.4 percent. See Performance for details.
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3. How does the market affect my retirement benefit? The market has no direct effect on benefits. LASERS is a Defined Benefit Plan, meaning your retirement benefits are set by law and guaranteed by the state regardless of market fluctuations. Your retirement benefit is based on your years of service, final average compensation, and benefit accrual rate set by law.
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4. What is LASERS target investment rate of return? The actuarial expected rate of return is currently seven and three quarters (7.75) percent.
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5. What is the process for choosing LASERS investment managers? The LASERS Board of Trustees chooses managers with the advice of investment staff and an independent investment consultant. Managers are chosen after a thorough comprehensive analysis and due diligence process.
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6. How is the asset allocation determined? Allocation is determined through the use of portfolio optimization techniques. This entails starting with a universe of securities or asset classes that has been valued in terms of (a) expected return, (b) volatility of expected return, and (c) correlation of the asset classes under consideration. The process of portfolio optimization involves selecting the portfolio that minimizes risk for a given level of return.
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