Investments Goals

The purpose of the Fund is to accumulate the financial reserves necessary to provide benefits to eligible members of the City of Austin Employees’ Retirement System and their beneficiaries.  The Fund will be structured and managed to maximize, net of all fees and expenses, the probability of:

  1. Achieving a long-term, annualized absolute rate of return that:
  • Meets or exceeds the assumed actuarial rate of return for the System;
  • Meets or exceeds the actuarially assumed rate of inflation by 4.75%.
  1. Achieving a long-term, risk-adjusted relative rate of return that:
  • Ranks in the top quartile of peer comparisons consistently;
  • Meets or exceeds the Passive Index (i.e. the Reference Portfolio); and
  • Meets or exceeds the Policy Index (i.e. the Strategic Benchmark).
  1. Achieving these strategic objectives via fiduciary best practices that:
  • Ensure proper diversification of asset classes and factor exposures;
  • Maintain appropriate long-term risk and return expectations; and
  • Adapt the asset allocation to changing market conditions.

The Board, with consultation, advice and assistance from the System’s Staff and Investment Consultant, will use the Fund’s strategic asset allocation and its effective implementation as the primary tools to achieve these goals.  A primary emphasis of the investment management of the Fund is consistency of growth by seeking to avoid both the permanent impairment of capital and the risk of inadequate long term returns.  Taxes shall not be a consideration except that the System’s tax exempt status should be preserved. 

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