Minnesota 2016 returns a sign of what’s to come?

The Minnesota State Board of Investment, the agency responsible for the investment management of various public retirement funds in that state, released its 2016 rate of return last week, and while a big improvement over 2015, it still fell short of its goal.

The year’s rate of return hit 7.6 percent, compared to zero percent the year before, but short of its 8.3 percent goal.

For comparison’s sake, the S&P 500 gained 9.5 percent last year, and the Dow jumped 13.4 percent.

We won’t see Colorado PERA’s 2016 results until June. Given how markets performed last year, we can be certain that they will show an improvement over 2015, when PERA returned just 1.5 percent. You might recall that last November PERA’s board dropped the projected long-term return rate from 7.5 percent to 7.25 percent.

Can PERA meet or top this slightly reduced benchmark? What would be considered a good year for PERA? Last year, compared to other state pension plans, 1.5 percent actually looked decent. Can PERA outperform other funds again this year?

These cliffhangers will have to wait until June for resolution. Stay tuned.

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