Investment Success Aligns With Pending COLA Report
The Commonwealth’s Pension Reserves Investment Trust (PRIT) Fund is on track to deliver the 6th double digit investment return in the past ten years. Through the first three quarters of 2025, the PRIT fund earned 10.24%, ending September with more than $121 billion in assets.
Not only does PRIT invest the pension assets of all retired and active state employees and teachers but also invests some, if not all assets of most of the state’s 102 local retirement systems. The success of PRIT, which is managed by the 9-member Pension Reserves Investment Management (PRIM) Board, is critical not only to the peace-of-mind of retirees and employees, but also to the ability to pay for and improve COLA benefits.
As members know, the Special COLA Commission is nearing the conclusion of its work which should be complete with the issuance of the Commission’s report just before the New Year. The 7-member Special Commission, on which Mass Retirees President Frank Valeri serves as an appointee of Governor Maura Healey, has spent nearly a year studying and analyzing steps that can be taken to increase the COLA base for State and Teacher Retirees, while also creating a new Enhanced COLA for career public employees who have been retired for 10 or more years.
A primary objective of the COLA Commission is to study and recommend funding sources that can be tapped to pay for benefit increases under the State and Teachers’ Retirement Systems. The COLA base for members of the State and Teachers’ Retirement Systems has only been increased once since 1997, when the base went from $12,000 to $13,000 in 2012.
“The importance of PRIT’s exceptional performance cannot be overstated. Not only are the State and Teachers’ Retirement Systems well on their way to be fully funded by 2036, if not sooner, but it should be clear that the system can support improved COLA benefits for retirees,” comments Valeri. “We cannot forget that these trust funds are for the exclusive benefit of the members of the retirement systems. These funds belong to the retirees, and a portion of excess investment returns must be shared with system members by way of better COLA benefits.”
CEO Shawn Duhamel makes the following observations: “During the same time of PRIT’s extraordinary success, inflation has skyrocketed. The CPI alone has increased some 37% since 2016 and this does not fully account for the affordability crisis we have when it comes to healthcare. Retirees need relief now and thankfully there is a way to help by sharing the success of the pension system.”
While official PRIT Fund returns for the first two months of the 4th quarter have yet to be certified, in general financial markets performed well in October and were relatively flat in November.
After quickly recovering from the 2008 financial crash, the PRIT fund has performed extraordinarily well. This is particularly true of the fund’s record over the past ten years, during which time PRIT has performed under its benchmark just twice, in 2018 and 2022 respectively. Under the current funding schedule, the assumed annual rate of return is 7%.
Since 2020, the PRIT Fund has grown by more than $50 billion dollars in total assets.
PRIT’s recent extraordinary success has occurred during the tenure of State Treasurer Deb Goldberg, who chairs the PRIM Board, and supported initiatives to rebalance asset allocation and diversification. Those important steps, which have undoubtedly contributed to PRIT’s success, were led by Executive Director and Chief Investment Officer Michael Trotsky.
“The PRIT Fund ended with yet another new record balance of $121.1 billion, surpassing the previous record balance set last quarter and marking the first time the balance has ever been more than $120 billion,” said Trotsky. “I’m extremely proud of the hard-working and dedicated PRIM Team, which has constructed this diversified yet high-performing portfolio on behalf of the Commonwealth and its beneficiaries.”