Record Year for PSPB

The Public Service Pensions Board (PSPB) has registered a substantial increase in funds for the financial year ended June 2007, raising its net assets by $66 million from US$207 million in June of the previous year to US$273 million.

"The Board and Managing Director Jewel Evans Lindsey are to be congratulated for their commitment and efforts in achieving the performance objectives. These reflect favourably on all those individuals associated with the management and administration of the pension funds," Financial Secretary Hon. Kenneth Jefferson said.

He added, "This rate of return represents a 16.7 per cent increase over the previous year and is the highest earned by the pension funds over the past five-year period."

The average rate of return of 162 high performing international pension funds stood at 15 per cent as at the end of June 2007, PSPB stated.

"The Board is pleased with these recent performance results, considering that three years ago the pension funds were below average when compared to results obtained by other pension funds," Mr Jefferson said.

Although the Board's one-year performance was 16.7 per cent, its three-year (period ended June 2007), annual rate of return for the pension funds was 10.2 per cent, which is above the level needed to cover its liabilities.

The PSPB funds' assets are currently comprised of 65 per cent equities, 27 per cent fixed income securities, three percent in the equities of real-estate holding entities, and five per cent cash and cash equivalents. It should be noted that no investment in sub-prime mortgages is held.

While enjoying reasonable returns, the Board remains watchful over the level of growth in light of continued volatility in stock markets. In order to safeguard against these challenges and ensure growth of the funds, the Board conducted an international search for a publicly listed global real estate securities investor and added to its list of investment managers the services of ING Clarion Global, a leading international equity real estate manager.

"We continually challenge ourselves to seek out strategies that protect the invested assets of the pension funds in order to generate above average rates of return," Mrs Evans Lindsey said.

She said that although economic growth in many major economies of the world has been adequate in the recent past, there are a number of risks that could affect future growth, including high energy prices, the size of the US budgetary and trade deficits, and geopolitical and terrorist risks.

How PSPB Works

The Public Service Pensions Board (the "Board") is entrusted with investing the assets of public pension funds and in doing so, identifies and pursues investment opportunities in accordance with legislation, best practices and the pension funds' Statement of Investment Policy and Procedures.

The Board has defined management's responsibilities as planning, executing and reporting the activities of the pension funds. In addition to these responsibilities, management, subject to the Board's approval, develops and implements all relevant policies including those in the areas of investment, communications, integrity and control, organization and compensation, and operations and administration. Throughout the process, management ensures that the pension funds are administered to be in compliance with all regulatory requirements.

The investment objective of the pension funds is to produce returns over the long term that, at a minimum, achieve the return required to meet the pension funds' liabilities in conjunction with the agreed upon long-term actuarial financing provisions.