State Employees’ Retirement Fund Market Value Altimeter
May 2007
| Valuation Date |
Market Value (in billions) |
| 3/31/07 | $11.392 |
| 2/28/07 | $11.304 |
| 1/31/07 | $11.369 |
| 12/31/06 | $11.311 |
| 9/30/06 | $10.836 |
| 6/30/06 | $10.494 |
| 3/31/06 | $10.590 |
| 12/31/05 | $10.273 |
| 12/31/04 | $9.785 |
| 12/31/03 | $9.369 |
| 12/31/02 | $8.573 |
| 12/31/01 | $9.914 |
| 12/31/00 | $10.890 |
| 12/31/99 | $11.055 |
| 12/31/98 | $10.020 |
| 12/31/97 | $8.922 |
| 12/31/96 | $7.654 |
| 12/31/94 | $5.385 |
| 12/31/90 | 3.9935 |
The aggregate market value of the State of Michigan Retirement Systems (SMRS) portfolio of investments hit another record, a high of $58.506 billion as of March 31, 2007. This includes the four state employee retirement funds of which the State Employees represents 19.5% of the plan or 11.392 billion. This 19.5% showed a 23 million increase from the previous high on January 31, 2007 of 11.369 billion.
The market value of the individual funds stood as follows on March 31, 2007.
| Market Value (in billions) |
% | ||
| Public School Employees | $45,537 | 77.8% | |
| State Employees | 11,392 | 19.5% | |
| State Police | 1,260 | 2.2% | |
| Judges | 317 | 0.5% | |
| $58,506 | 100.0% | ||
All of the categories of assets in the SMRS portfolios rose in market value since March 31, 2006 with the exception of International Equity. The following shows their respective changes:
| Market Value | ||||
| Domestic Equity | $28,137 | 48.1% | $26,214 | 48.6% |
| Fixed Income Sec. | 9,308 | 15.9% | 8,607 | 15.9% |
| International Equity | 7,227 | 12.3% | 7,410 | 13.7% |
| Alternative Investments | 7,195 | 12.3% | 6,469 | 12.0% |
| Real Estate | 4,864 | 8.3% | 4,079 | 7.6% |
| Short Term | 1,429 | 2.5% | 1,207 | 2.2% |
| Tactical Assets | 346 | 0.6% | 0 | 0.0% |
| TOTAL | $58,506 | 100.0% | $53,986 | 100.0% |
The SMRS is the 39th largest pension fund in the world. The 14th largest public pension fund in the U.S. and the 20th largest pension in the U.S.
We are again happy to repeat the excellent performance of the SMRS. Unfortunately the State of Michigan presently is experiencing great budget woes; one problem is that tax revenues are far short of expectations. Those individuals working under that state dome should realize the pension funds are sacrosanct. Though those experts who are investing our pension funds recognize the number of risks involved in their jobs, many of which are outside their direct control, appear to be beating the odds. Real estate has taken a hit nearly countrywide yet our funds showed a market increase in that category the past year.
Observations, Facts and Assumptions
Who do you trust? Some observers say increases in the cost of living are still small and therefore not anything to worry about. Mr. Steve Forbes, Editor in Chief of Forbes Magazine, in commenting on the present economy, comes up with some scary observations. He states if the Federal Reserve messes up it takes a year or two for the mistake to become apparent in the “broader economy.” Mr. Forbes continues “The Greenspan-Bernanke mistake has already increased short term interest rates nearly five-fold since 2004. It overheated the housing market now undergoing a painful correction. It induced lenders to extend credit over eagerly and over generously to “subprime” borrowers. It fanned the hothouse growth of hedge and equity funds. It shattered GM, Ford and DaimlerChrysler and by shooting up gas prices which crated sales of their SUVs. The artificial oil boom has given the criminal regimes of Iran and Venezuela lethally large cash windfalls to stoke terrorism.” Mr. Forbes also believes he Fed will probably raise short-term interest rates again before the year’s end. He states one cure that the Fed could do would be to sell some of the government bonds it holds in its portfolio. We hope the latter takes place if it will help the economy.
The Dow Jones stock market hit 13.089 a new high on April 18, 2007, six months after it hit 12,000. We read there was little excitement on the New York stock exchange that day because what goes up can come down within hours. It was viewed as just another number. A change can happen in a flash with an uncertain economy, higher energy prices and a housing market in flux.
May is a month of various occasions: May 1 — Law Day; May 2 — this writer’s wedding anniversary (Jean and I have been married 62 years); May 3 — National Day of Prayer; May 8 — VE Day declared; May 13 — Mother’s Day (a day of remembrance); —May 19 — Armed Forces Day; May 28 — Memorial Day Observed. As one of America’s older war veterans (World II) this day has a great meaning to me. There are fewer and fewer of us left to carry the torch. We trust with two wars underway the younger element will respect the relevance of Memorial Day. It’s a sacred day for all war veterans.
Did You Know
- The world’s 946 billionaires are citizens of 53 different nations. The U.S. has 415; an increase of 44 since 2006. India has 36 and China 20.
- Mr. Carlton Cole Magee invented the first parking meter in 1932, receiving a patent for it in 1935.
- Michigan became a recycling leader when legislation placed a 10c deposit on cans in 1976.
Ponder This
- Those who jump off a bridge in Paris are in Seine.
- Time flies like an arrow — Fruit flies like a banana.
- A family budget is a process of checks and balance; the checks wipe out the balance.
- Don’t let aging get you down — it’s too hard to get back up.
Commentary
It was March 19, 2007 that I received a telephone call from the State Civil Service Office advising my tour of duty as a facilitator at State Preretirement Seminars was ended. The economy is in a slow down and contracts with certain individuals with the State were being terminated. Jim Weiskopf in Detroit, Bruce Andrews or his representative in the U.P. and I all received the news. The contracts included a small stipend plus expenses.
My first venture as a facilitator was June 1, 1989 — 18 years ago. The job entailed approving rooms for adequate size and comfort for attendees, register attendants, introduce speakers and give SERA presentations. The percent of those present that ultimately signed as a future SERA member varied between 20 and 25%. Those individuals usually chose the Chapter nearest to their residence. I estimated registering more than 22,000 seminar attendees during my tour of duty.
Editor’s note: Al Trierweiter is a former President of the Lansing SERA Chapter, former Chairman of the Michigan SERA Coordinating Council, former Legislative Representative for both the Lansing Chapter and the SERA Council. AI may be reached at 6440 Old River Trail, Lansing 48917; phone 321-0041.
Return to top of page