Retirement Systems of Alabama

The Retirement Systems of Alabama is the administrator of the state pension fund and is headquartered in Montgomery Alabama. The Boards of Control are at the top of the organization system, deciding and overseeing the long term progress of the system. The executive officer, currently David Bronner, oversees day to day management of the system. The systems within the Retirement Systems of Alabama include the Employees Retirement System (ERS), Judicial Retirement Fund (JRF), Teacher’s Retirement System (TRS), Public Education Employees’ Health Insurance Plan, and RSA-1 Deferred Compensation Plan. The Retirement Systems of Alabama, RSA for short, invests the funds of the system in numerous diver asset classes including equities, bonds, real estate and other alternative investments in order to ensure that it can earn the “highest possible risk-adjusted rate of return and pay benefits to members and their beneficiaries at the lowest possible cost to Alabama taxpayers.” Looking at the asset allocations of the TRS, ERS, and JRF, we see that the systems focus mostly on domestic C&P stocks, with each of the three systems investing over half of their total assets in these stocks. The systems, which all follow a very similar investment allocation strategy, also invest in the international C&P stocks, domestic bonds, real estate, money market securities, U.S. government guaranteed bonds, mortgage backed securities, and U.S. agency securities, listed in order of decreasing amount allocated. The conservative investment strategies of the systems have managed to bring in over 6.4% returns for TRS, over 6.1% returns for ERS, and over 7.1% returns for the JRF in the ten year period ending in 2014. The RSA measures its performance against a variety of benchmarks including the S&P 500, DJIA, Morgan Stanley EAFE, Citigroup Big, and Barclays, among others. The RSA is currently ranked within the top 20 largest internally funded pension funds in the world.