How VRS Keeps Your Future Pension Benefit Secure

May 2025
Decorative. Rear view of a man seated at a desk in an office with plants at either end and a window beyond. He is observing three side-by-side computer monitors showing financial information.

When thinking about retirement security, it’s natural to sometimes feel a little … uncertain.

Stock market volatility can amplify worries. Rest assured that the VRS trust fund is well-positioned to keep pension benefits flowing now and into the future.

Members’ VRS pension benefits are based on qualifying factors, such as age, years of service and compensation. So, it is not affected by changes in investment markets. Members can view estimates of their pension benefits any time by logging into myVRS.

Read on for answers to questions about how VRS invests.

How does VRS make investment decisions?

First and foremost, with members’ financial security in mind. Members of the VRS Board of Trustees serve as fiduciaries of the VRS Trust Fund, ensuring investments are made “in the best interests of VRS members, retirees and beneficiaries,” says Board Chair Scott Andrews.

The board, governed by the Code of Virginia, sets the portfolio policy. VRS’ investment team executes the board’s policy through external investment manager selection, active management and in-house investment management of approximately one-third of VRS assets.

VRS investment professionals are highly skilled, averaging 18 years of investment experience and more than 10 years of service with VRS.

Their active management has added $7.2 billion to the portfolio over the past decade that would not have been realized from managing a passive, indexed portfolio.

By managing part of its investment fund in-house, VRS saves approximately $122 million in fees annually, according to CEM Benchmarking, which studies how pension funds control costs. The Wilshire Trust Universe Comparison Service (TUCS), an industry benchmark for evaluating large investment funds, places VRS in the optimal quadrant, producing more return at less risk when compared to peers.

VRS’ success in investing is crucial to meeting pension obligations, since two-thirds of pension benefits derive from investment gains over time.

What strategy guides VRS’ investment choices?

VRS invests for the long term, seeking to maximize return while managing risk across the entire portfolio. VRS ensures its portfolio is diversified across stocks, fixed income and other investments, which helps to moderate the highs and lows of the market.

“The investment team monitors markets for opportunities to generate meaningful returns and to mitigate risks that may arise,” says VRS Chief Investment Officer Andrew Junkin. “Our focus on diversification and risk management provides downside risk protection during periods of volatility.”

What investments does the VRS trust hold?

As of June 30, 2024, about 33% of the fund was invested in publicly traded stocks. Other large investment classes included private equity (17%), credit strategies (15%), fixed income (15%) and real assets (12%).

Find the latest asset allocation figures and learn more about VRS’ investment objectives on the Investments page. Be sure to check out the accompanying video for each subject tab, or view the full series on our YouTube channel.

What about the defined contribution component of the Hybrid Retirement Plan?

Members of the Hybrid Retirement Plan also have a defined contribution benefit. You manage investments and related risk for this component. VRS and Voya are here to support you.

See the defined contribution plan’s education page for information about financial planning and advisory services. For help navigating volatile markets, review these two flyers: Stay the Course and Market Timing.