Key Takeaways
- • Howard County Retirement Plans (Ellicott City, Maryland) delivered a gross return of 9.9% for the fiscal year ended June 30, 2025, underperforming its policy benchmark despite solid absolute performance.
- • The plan's net position grew to $720.5 million as of June 30, 2025, from $658 million in the prior year, reflecting positive asset accumulation despite benchmark underperformance.
- • Howard County's 9.9% return aligns with broader institutional pension performance, though it trails the Maryland State Retirement and Pension System's 9.83% benchmark-beating return for the same fiscal period.
- • The plan covers 3,471 total members as of June 30, 2025 (including 2,043 active employees, 1,127 retirees and beneficiaries, and 286 terminated vested members), with active membership growing steadily from 1,938 in 2024.
- • Benchmark underperformance reflects broader industry challenges, with the national average assumed rate of return for state pension plans standing at 6.9% (median 7.0%), placing Howard County's performance above long-term actuarial assumptions.
Summary
The Howard County Retirement Plan, a single-employer defined benefit public pension administered by Howard County, Maryland, reported a gross return of 9.9% for the fiscal year ended June 30, 2025. While this represents solid absolute performance, the return fell short of the plan's established policy benchmark, raising questions about asset allocation execution and market timing during a period of strong equity market performance.
The plan's net fiduciary position strengthened to $720.5 million as of June 30, 2025, up from $658 million in the prior fiscal year, demonstrating positive asset growth despite benchmark underperformance. This improvement occurred amid a membership base that grew to 3,471 total members, including 2,043 active employees (up from 1,938 in 2024), 1,127 retirees and beneficiaries, 15 disabled members, and 286 terminated vested participants. The increasing active membership base suggests sustained contribution inflows and a growing pension liability base that the fund must support.
The Retirement Committee, composed of seven members with authority to establish and amend benefit and contribution provisions, oversees the plan's administration and investment strategy. The plan provides retirement benefits, death and disability benefits, and cost-of-living adjustments (COLAs) to eligible employees, operating on an accrual basis of accounting with investments reported at fair value.
Contextually, Howard County's benchmark underperformance diverges from the Maryland State Retirement and Pension System, which exceeded its benchmark with a 9.83% return for the same fiscal year. However, both systems delivered returns substantially above the national average assumed rate of return for state pension plans, which stands at 6.9% as of September 2022 (median 7.0%), indicating that even underperforming funds are meeting or exceeding long-term actuarial return assumptions. This positions Howard County favorably for funding adequacy despite falling short of its specific policy benchmark.
The plan's net fiduciary position strengthened to $720.5 million as of June 30, 2025, up from $658 million in the prior fiscal year, demonstrating positive asset growth despite benchmark underperformance. This improvement occurred amid a membership base that grew to 3,471 total members, including 2,043 active employees (up from 1,938 in 2024), 1,127 retirees and beneficiaries, 15 disabled members, and 286 terminated vested participants. The increasing active membership base suggests sustained contribution inflows and a growing pension liability base that the fund must support.
The Retirement Committee, composed of seven members with authority to establish and amend benefit and contribution provisions, oversees the plan's administration and investment strategy. The plan provides retirement benefits, death and disability benefits, and cost-of-living adjustments (COLAs) to eligible employees, operating on an accrual basis of accounting with investments reported at fair value.
Contextually, Howard County's benchmark underperformance diverges from the Maryland State Retirement and Pension System, which exceeded its benchmark with a 9.83% return for the same fiscal year. However, both systems delivered returns substantially above the national average assumed rate of return for state pension plans, which stands at 6.9% as of September 2022 (median 7.0%), indicating that even underperforming funds are meeting or exceeding long-term actuarial return assumptions. This positions Howard County favorably for funding adequacy despite falling short of its specific policy benchmark.
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