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Missouri Department of Transportation & Missouri State Highway Patrol Employees’ Retirement System

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Coronavirus Impacts and the MPERS’ Investment Portfolio

March 13, 2019

First and foremost, it is important to emphasize to all our members that retirement benefits remain secure. The predefined nature of your retirement benefit means that your benefits are not impacted by the stock market swings the coronavirus is causing today.

Global equity markets have traded significantly lower as the coronavirus continues to spread around the globe. The outbreak is moving quickly, as are the financial markets, so it is likely that this perspective will be out of date in the near future. This update reflects our current perspective of how the virus is impacting MPERS today; however, we will provide updates as market conditions evolve.

Having said that, the coronavirus is going to have a material impact on global economic growth over the coming months. The impact on travel, tourism, and general economic activity may lead the U.S. economy into its first recession since the financial crisis of 2008-09. The good news is that, relative to the financial crisis, the overall health of the consumer is much stronger today. Interest rates and unemployment levels are near all-time lows, and the banking industry is well capitalized and stands ready to support the consumer once the outbreak has been contained.

The expected slowdown of economic growth has sent global stock markets down over 20%  from their highs only 30 days ago. While these are significant losses to the stock markets, it is important to note that MPERS’ investment portfolio is well-diversified and structured to perform well in a wide range of economic environments. This diversified approach will serve the system well during this latest financial market downturn.

As the extent of the coronavirus pandemic continues to unfold, we are mindful of the day-to-day volatility within the markets and are in constant communication with various market participants to evaluate potential developments. We continue to believe that until there is more clarity around the spread of the virus and the potential fiscal stimulus packages under consideration by global leaders, the stock markets will remain volatile. MPERS has a long-term investment horizon, and it is important to remember you have an experienced staff of investment professionals monitoring the situation every day.

Lastly, we want to remind all our members again that your benefits are secure. MPERS is a long-term investor and has the staff and resources to work through this current market volatility. The Board and professional staff are committed to managing the System’s assets in a prudent manner that will ensure the longevity of your pension.