Fiscal Year 2025 in Review
Fiscal Year 2025 in Review
The Connecticut Retirement Plans and Trust Funds (“CRPTF”) delivered an annual total return of 10.14 percent, net of all fees and expenses, for the fiscal year ending June 30, 2025.
The two largest pension funds in the Connecticut Retirement Plans and Trust Funds (CRPTF), the Teachers’ Retirement Fund (TERF) and the State Employees’ Retirement Fund (SERF), generated net investment returns of 10.15 and 10.13 percent, respectively for Fiscal Year 2025. For the longer-term period of ten years, ending June 30, 2025, TERF and SERF generated net investment results of 7.29 percent and 7.39 percent, closely following the plans’ composite benchmark returns.
The CRPTF performance results were very strong during Fiscal Year 2025 benefiting from the financial markets continued strength and resilience above expectations. The strongest investment performances at the asset class level were realized within the Global Equity (Domestic, Developed and Emerging Markets Equity) portfolios. In private markets, Private Credit was a particular standout taking advantage of favorable economic conditions and efficiently capturing an illiquidity premium and certain market inefficiencies relative to public debt markets.
Over the course of 2025 Fiscal Year, the CRPTF continued to make progress towards long-term asset allocation policy targets and made significant new investment commitments. The CRPTF committed over $7 billion towards new and existing partnerships in the private market asset classes. These investments are comprised of 13 new vehicles and three upsize commitments approximating $3.5 billion in Private Equity, three new investment vehicles and two upsize commitments approximating $1.8 billion in Private Credit, the addition of six new investments totaling $1.1 billion in Real Estate, and $850 million in Infrastructure and Natural resources commitments through three new funds and two upsize commitments. In the public markets, the CRPTF continued to optimize individual asset class structures by streamlining and reducing external investment manager rosters to better align the portfolios with the policy level benchmarks, and actively negotiating reductions in management fees.
The Connecticut Inclusive Investment Initiative (Ci3) which targets diversified emerging managers had $2.4 billion in investments on June 30, 2025. The capital with Ci3 is nearly evenly split between public and private investments and totaled $1.1 billion across the various public asset classes, and nearly $1.3 billion for the private asset classes.
Budgetary reforms in recent years have stabilized Connecticut’s finances and resulted in record surpluses, with the Budget Reserve Fund (BRF) being filled to capacity, allowing for billions in additional contributions to the State’s pension funds. The Office of the Treasurer supported the extension of those reforms, known as the fiscal guardrails, which were initially approved by the legislature in 2017 and renewed in 2023. At the conclusion of Fiscal Year 2025, the BRF had exceeded its statutory limit of 18 percent of General Fund revenue.
At the end of Fiscal Year 2025, the BRF remained above its statutory limit, with approximately $1.5 billion in excess contributions available to pay down unfunded pension liabilities. At the Treasurer’s direction, those deposits were split with approximately 55 percent in SERF and 45 percent in TERF. In November 2025, $894.7 million was deposited into SERF and $592.8 million was deposited into TERF. The growth of the BRF allowed the State to responsibly pay down long-term unfunded pension liabilities.