The South Dakota Retirement System's assets have grown to a record high of more than $10.6 billion after earning 18.9 percent on investments in the past fiscal year, officials said Thursday.
The system's assets peaked at about $8.2 billion in 2007 and then plummeted during the recession. Those assets then rose to the new high by June 30, up more than $1.7 billion for the most recent fiscal year, according to Tammy Otten, South Dakota's assistant state investment officer.
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Otten presented the fiscal year's returns at the retirement system's quarterly meeting in Pierre on Thursday.
The gains marked the second year of solid growth for the system, which saw a 19 percent net increase in fiscal year 2013 that brought in close to $1.5 billion.
The system paid out $236 million in benefits to employees in Fiscal Year 2014, Otten said.
Otten said it would be difficult to repeat the system's success in the near future with the markets.
"But the good news is ... we had a very good return. We had very good return relative to our benchmark, and we had a very good return relative to our peers," she said.
The system's investments outpaced the predicted benchmark of a 17.5 percent increase set by the South Dakota Investment Council.
The Board of Trustees has consistently touted the state's retirement system as one of the best in the nation.
This year, the state's market returns ranked in the top 4th percentile of all public retirement funds, according to documents released at Thursday's meeting. It ranked in the top 8th percentile of public funds with assets greater than $1 billion.
Members of the retirement system include all state public employees, ranging from teachers to the governor's staff.
The system's good financial health means pension payments should increase on July 1, 2015, by 3.1 percent, the maximum amount allowed by state law.
Although the system has seen substantial growth in recent years, Matt Clark, the state investment officer, said the state needs to prepare for financial downturns in the future that could undercut the system's wealth drastically.
James Hansen, a retired administrator from Pierre who represents retirees as trustee, said it would be more prudent to take precautionary measures instead of waiting for disaster to strike.
"We ought to do it now rather than when it happens," he said.
Others said the system is well-funded and shouldn't be changed just yet. No immediate action was taken Thursday.
The board will take up the subject again in December, but said it was likely they wouldn't approach the Legislature on the matter in the upcoming session.