ERS manages retirement trust assets of approximately $35.9 billion on behalf of state employees and retirees, who are the beneficiaries of the Trust.  Investment returns continue to be the single largest funding component of retirement benefits, accounting for more than 60% of the benefits provided by the ERS Trust.

The ERS Board of Trustees, acting upon a recommendation by the Investment Advisory Committee and ERS investment staff, has adopted an asset allocation strategy to provide long-term capital appreciation while maintaining an acceptable level of risk.

Pension Funds Investment Pool Return

ERS invests on a long-term basis with the goal of earning superior risk-adjusted investment returns for the Trust at a reasonable cost to help provide retirement benefits for the lifetime of State of Texas retirees.  In the chart below the net investment returns of the Trust over varying time horizons are compared to those of the Policy Benchmark, which represent the expected returns of the Trust’s strategic asset allocation without any gains from effective implementation.

As of October 2023

October 2023 Pension funds investment pool return chart. Long description of chart above.

ERS Retirement Trust Asset Allocation

The investments of the ERS Trust include a highly diversified mix of investment strategies with a mix of active and passive management. Investment asset classes include domestic and international equities, private equity, government bonds, credit, real estate, hedge funds, and infrastructure.

Such a portfolio mix generally allows ERS to earn steady long-term gains, generate sufficient cash flow to pay monthly benefits, and limit downside risk during poor economic conditions.

Total Trust value as of October 2023 - $35.9 billion

Asset ClassOctober 2023Strategic Target
Public Equity30.3 %35 %
Private Equity18.1 %16 %
Public Credit6.7 %9 %
Private Credit3.8 %3 %
Public Real Estate1.5 %3 %
Private Real Estate10.9 %9 %
Infrastructure6.1 %5 %
Rates9.2 %12 %
Hedge Funds5.7 %6 %
Special Situations0.3 %0 %
Cash7.3 %2 %
TOTAL100 %100 %