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TRS Investment strategies Protect Benefit Payments

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Each year, Teachers’ Retirement System distributes approximately $7 billion in benefits to retired members and beneficiaries, or about $575 million every month. Those benefits must be – and always have been – paid each month, no matter what the economic conditions may be.

TRS will continue to have sufficient funds to meet all benefit payments on time and in full for the foreseeable future despite the worldwide economic upheaval created by the spread of the coronavirus.

The System’s defensive investment strategy enabled TRS to protect the bulk of member assets during recent market upheavals. On December 31, 2019 TRS assets stood at $54.24 billion. As of April 20, 2020, the investment portfolio was valued at $50.18 billion.

“The impact of the economy’s hard stop is being felt in every household, every business, every school and every government in the United States. TRS is not immune,” said TRS Executive Director Dick Ingram. “TRS was able to limit the economic damage from the coronavirus because our investment strategy emphasizes keeping risk at a minimum.”

A key element of the TRS investment program is to maintain a focus on steady, long-term investment returns. Short-term corrections in the investment markets get the headlines, but TRS recognizes that the majority of its members maintain relationships with the System that last for several decades.

For instance, the 40-year return for TRS at the end of 2019 was 9.1 percent. During the same period, the annualized return for the S&P 500 index was 8.4 percent.

In its 81-year history, TRS has survived numerous economy-shattering events, including World War II and the resulting reconstruction of Europe and Asia, wars in Korea and Vietnam, oil supply crises in 1973 and 1979; runaway inflation in the 1970s and 1980s; numerous stock market “corrections;" the Iraq invasion of Kuwait, the terrorist attacks of September 11, 2001 and five global health epidemics – SARS, Ebola, the Avian Flu, the Zika virus and the Swine Flu.

 “Our long-term perspective and strategy serve our members well,” Ingram added.

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