Cost Effectiveness

IPERS strives to maximize our return on investments within the risk parameters established by the Investment Board in its Investment Policy. An important part of that objective is controlling investment costs. To better understand costs and performance, IPERS participates in an annual independent study performed by CEM Benchmarking Inc., an international benchmarking company that collects information from U.S. and foreign retirement systems. This study allows IPERS to compare our investment costs and performance to similar pension funds.

In the 2007 study, CEM compared IPERS’ returns to 129 U.S. pension funds and our costs to a peer group of 21 pension funds similar in size. IPERS was in the low cost category. However, investment performance was slightly below the benchmark (-0.10%), placing IPERS in the negative value added category.  

The study indicated that over the past five years investment performance suffered because IPERS was below its target allocation to private equity. Investment strategies in the domestic and international equity portfolios also hurt performance. IPERS is changing approaches and working to improve returns from active management in these asset classes.