Tennessee Consolidated Retirement System finishes FY24 with 10.06% investment return

The Tennessee Consolidated Retirement System wrapped up the 2024 fiscal year with a 10.06% investment return, well exceeding the plan’s 6.75% assumed rate of return.

The annual earnings represent over $6.2 billion in new investment income added to the portfolio in a single year. The TCRS portfolio value stood at $69.4 billion, as of June 30, 2024.

TCRS paid $3.28 billion in benefits in FY24 to 161,993 retirees across the state, 92% of whom remain in Tennessee. The retirement benefits paid by TCRS have an economic impact in all 95 counties.

“Our plan’s success is a combination of sound financial management and the support of our Governor and General Assembly, which consistently ensures the plan is fully funded every year,” said State Treasurer David H. Lillard, Jr. “The Tennessee Department of Treasury strives to be good stewards of the state’s financial resources. This $6.2 billion in investment income is evidence of our commitment to both active and retired members of the TCRS pension plan.”

For every $100 paid today in retirement benefits, $68 comes from investment earnings. Tennessee Treasury Investments Division, led by Chief Investment Officer Michael Brakebill, manages the majority of assets for

TCRS internally, helping to save significantly on investment costs by using an in-house staff of investment professionals with extensive education, professional training, and certifications. This team includes members with substantial institutional investor experience in both the public and private sectors. The TCRS portfolio is structured to be a naturally conservative fund and is widely diversified to minimize risk.

“The 2024 performance for TCRS was very satisfying in an oddly challenging marketplace,” Mr. Brakebill said. “Our broadly diversified investment portfolio was able to capture significant benefits from this extraordinary period while still maintaining substantial risk control.”

Last year, Tennessee was ranked the No. 1 lowest total unfunded pension liabilities per capita in a 2023 report by the Center for State Fiscal Reform, part of the American Legislative Exchange Council. The report examined the burden of all 50 state pensions’ unfunded liabilities on every man, woman, and child in their respective state. Tennessee’s well-funded pension plan provides a monthly retirement benefit to retirees across the state without liability on its citizens. 

For the 36th consecutive year, the TCRS was awarded a Certificate of Achievement for Excellence in Financial Reporting from the Government Finance Officers Association (GFOA) for its FY23 Comprehensive Annual Financial Report. The Certificate of Achievement is the highest form of recognition in governmental accounting and financial reporting.