ATRS Investments: Global, Diversified, Professionally Managed

ATRS has been investing and safeguarding retirement assets for Arkansas’s public education professionals since 1937. The investment returns that we generate enable us to keep the promise of a guaranteed lifetime retirement benefit for our members.

I often get questions from members about our investments – where and how we invest, who is responsible, and how we are doing. I find that members sometime don’t fully comprehend the size and reach of our investments. We at ATRS are responsible for an investment portfolio of more than $22 billion. Just last year, our investments added more than $2 billion to the System’s assets, funds that will be used to pay future retirement benefits for ATRS members.

In their last few meetings, the ATRS Board has approved several new investments, each of them ranging from $40 million to $100 million. That’s a lot of money, and we firmly believe that every dollar counts. But for perspective, remember that a $40 million investment represents less than 0.2% of our overall portfolio.

I describe our ATRS investment portfolio as having three important qualities. Our portfolio is global, it is diversified, and it is professionally managed.

Global Investments: There are more than 60 stock exchanges operating around the world, trading stock in thousands of different companies. ATRS is invested in most of those stock exchanges and has stock ownership in most of those companies. This means that ATRS has a stake in literally thousands of stocks and bonds all over the world.

The majority of our investment portfolio is in the United States, because the US is the world’s largest economy. When US stocks are down, our global investments help balance out any losses and ensure that we can profit from other thriving markets around the world.

It can be surprising to know just how far our global reach is. ATRS has a stake in everything from Apple stock in the US, to corporate bonds issued in Japan by Mitsubishi, to government bonds issued by Peru.

Diversification: ATRS spreads its funds among many different types of investments. A little less than half of our portfolio is invested in stocks, and another 20% is invested in fixed income products like bonds. The rest of the portfolio is invested in funds that are not publicly traded. This includes things like private equity, real estate, timber, and agriculture.

The reason that we diversify our investment portfolio among many types of investments is that it smooths out the ups and downs of investing (or, to put it in the technical language of the professionals, it reduces volatility). When one type of investment is down, other types are steady or up, balancing out any losses.

Professional Management: Outside expertise is what brings it all together. ATRS hires top notch experts, people who manage assets for large corporations, wealthy families, and other large institutional investors like ATRS. And that gives us access to investment opportunities that just aren’t available to the public or to individual investors.

Under state law, ATRS cannot make an investment without receiving the “advice” of an outside investment consultant. Our investment consultants advise the ATRS Board and staff on our overall investment strategy. They make recommendations for the selection of individual investment managers to invest ATRS funds. The consultants then monitor the work of those managers to ensure we are getting the best return for our money.

Over the years, ATRS has worked with hundreds of different investment managers all over the world. If you’re curious to know what investment managers ATRS uses, we publish a list every year in our Annual Comprehensive Financial Report. You can find last year’s report, as well as the reports for the last 20 years, at this link:

https://www.artrs.gov/publications

These three qualities of the ATRS investment portfolio – global reach, diversification, and professional management, have paid off for ATRS members with excellent returns over time. According to our most recent investment reports, ATRS has a 10-year return of 8.0%. That return puts us in the top 3% percentile of public pension funds around the country.    

If you ever have a question or concern about ATRS investments, you are welcome to call or email me anytime. My contact information is below. I am always glad to talk to ATRS members and answer their questions.   

Mark White
Executive Director, ATRS
MarkW@artrs.gov
Office: (501) 621-8853
Cell: (501) 541-2057

Executive Director Update: ATRS Financial Health + Retirement Application Deadlines

Earlier this year, we provided the Board of Trustees with our actuarial valuation reports for the 2023-2024 school year. I admit the reports don’t make for exciting reading, and they might even qualify as a sleep aid. But they do make some important points about the financial health of ATRS. 

Retirement and pension systems like ours are built on a promise to pay lifetime benefits to all of our members -- both those who have already retired as well as those who are still actively working. To meet that promise, we have to address and plan for many different factors -- the health of the national economy, the performance of our investment portfolio, our members’ life expectancy, and increases in teacher pay that affect benefits and contributions, just to name a few examples. 

We hire professional actuaries to take all those variables into account and then project what it will cost to pay those decades’ worth of retirement benefits. The actuaries then evaluate how prepared our system is to keep that promise. They update their projections and evaluations every year, so that we can make course corrections as necessary.

Our actuaries are with the firm of Gabriel, Roeder, Smith & Company (GRS). They are a national firm and work with many other pension systems around the country. Their firm has a long history with ATRS -- they have been preparing the ATRS actuarial valuations for more than 60 years! 

ATRS Financial Health

According to these latest valuation reports, ATRS is 100% funded as to future benefit payments for all of our current retirees and beneficiaries. In other words, ATRS has enough assets already on hand to fully pay out monthly benefits for life for every retired member. This is a goal that ATRS has consistently met every year since 1980. 

When we zoom out to also consider the future benefits that will be owed to our members who are still actively working, ATRS is 85% funded. In other words, even if ATRS closed up shop and did nothing but send out checks to all of our members for the benefits they’ve already earned, we have enough funds on hand to pay 85% of those benefits. 

This is a good, healthy number, because pension systems are usually considered healthy if their funded position is 80% or greater. The reason why it doesn’t have to be 100% is that this number is a very conservative estimate. It doesn’t account for the member and employer contributions that ATRS will continue to collect in the coming years. It assumes a conservative investment return, and historically ATRS has earned returns larger than that assumed rate over time. 

But it’s also important to remember that this 85% number is only a snapshot of a single moment. What’s more important is the trend over time and whether that funded position is stable. And when you look at our history, our position is stable. Over the last 20 years our funded position has ranged between 71% and 85%, and it has been trending up for several years.  

What this means is that ATRS is financially strong, and that we are prepared to keep the promise of lifetime retirement benefits for all of our members. 

Interesting Facts & Figures 

The actuarial valuation reports also provide some interesting information on our System and its members during the 2024 school year:

• ATRS paid retirement benefits to 56,177 retirees and surviving beneficiaries, totaling $1.4 billion. That’s about a 3% increase over 2023. 
• The average member retirement benefit was $24,988 annually.
• We have 1,021 retirees and beneficiaries who are age 90 to 94, and 284 who are 95 or older.
• The average age of an ATRS retiree is 72, and the average age of an active employee is 44. 
• About 77% of our members are female and 23% are male. 
• Schools and our other covered employers reported 75,646 employees, receiving a total payroll of $3.612 billion. 
• We have 886 active members still working who are 70 or older. 

You can find our actuarial valuation reports and read them for yourself at this link:

https://www.artrs.gov/publications 

May 31 Retirement Deadline

We are nearing the end of our retirement season, as May 31 is the deadline for active members to apply to enter T-DROP or apply for a July 1 retirement date. If a member gets us a retirement application after May 31, it will just delay their effective retirement date until the following month. But for T-DROP, if a member does not meet the deadline, they must wait until the next year to enter T-DROP. 

Please remember that you are responsible for sending us your retirement or T-DROP application. Never assume that your school business office will send the application for you, because that’s not their job. 

Also remember that ATRS has made it easy and convenient for you to apply for retirement or T-DROP online via your member portal account.  You must be vested and at least age 60, or have 28 years of service credit, to apply online for retirement or T-DROP. Otherwise, you will need to submit a paper application.

If you have any questions about your retirement options, or if you would like to get benefit estimates to help you plan, please contact one of our counselors by emailing us at info@artrs.gov or calling (501) 682-1517. You can also check out our new Retirement Planner that explains all your options at this link: 

https://www.artrs.gov/Publications/ATRS_2025_April_Planner_Members.pdf


Mark White
Executive Director, ATRS
MarkW@artrs.gov
Office: (501) 621-8853
Cell: (501) 541-2057