Investments by the Public Employees Retirement System has posted a 12 percent return since July, ending three years of subpar performance.
"We're grateful to see the rebound," Investment Officer Laura Wallace told the Legislature's Interim Retirement and Benefits Committee in reporting Wednesday on the status of the $16 billion retirement system for state and local government employees.
Wallace said stock market investments have shown a big recovery following a dismal period. The retirement system has hired 29 different firms to handle investments.
Since 1984, the system has earned an average of 10.7 percent on its investments. But it lost 1.7 percent in fiscal 2001 and 2.8 percent in 2002 before going up a 4.8 percent gain in fiscal 2003.
The system invests 40 percent in U.S. stocks, 30 percent in U.S. bonds and 10 percent each in international stocks, international bonds and alternate investments such as real estate.
Wallace said the system has a goal of achieving an 8 percent gain each year on its investments.
Dana Bilyeu, PERS executive officer, said 87,327 government employees were enrolled in the retirement system in July, while 27,040 received benefits.
That ratio of 3.2 employees for every retiree is the lowest ever. In 1978, there were seven employees for each retiree. There are no plans to increase contributions by workers before July 2005, she said.
"We are emerging from a very difficult investment environment," she added.