State Treasurer Erick Russell achieved a 14% increase last year investing Connecticut’s pension fund assets, gaining roughly $8.3 billion for retirement programs for state employees, teachers and other municipal workers. 

The state, which oversees nearly $69 billion in pension assets, aims for an average annual return on pension investments of 6.9%. 

Expectations for bigger gains grew throughout the past year as key stock market indices surged. The Dow Jones Industrial Average, an index of 30 prominent companies listed on stock exchanges, grew by more than 13% in 2025. And the S&P 500, which follows 500 traded companies, topped 16%.

Among peer states and other entities that manage public pension funds holding more than $10 billion in assets, Connecticut’s 2025 performance ranks in the top 17%, Russell said. 

But the treasurer, who also announced this week he will seek a second term, said the latest big earnings stem from more than the big gains Wall Street enjoyed in 2025. 

“Markets certainly have been strong, but a lot of this is about our overall asset allocation,” said Russell, who updated the Investment Advisory Council Tuesday on the state’s portfolio. “The progress we’ve been making … is a good sign that we’re set up for future success.” 

Russell also reported investment gains of 10.3% for the 2024 calendar year and 12.8% for 2023. 

State officials particularly have focused on improving investment returns since a May 2023 report from Yale University researchers found Connecticut’s results badly lagged the nation’s over the prior decade. 

That only compounded an even larger pension problem that state officials began to address in the early 2010s. According to the Center for Retirement Research at Boston College, Connecticut governors and legislatures failed to save adequate for pension benefits for more than seven decades prior to 2011. This deprived the state treasurer of huge assets that otherwise could have been invested to generate billions of dollars in revenue over those seven decades. 

The treasurer’s office under Russell has put more funds into private and domestic markets and curbed reliance on investment managers who receive large fees for their work. 

Gov. Ned Lamont and the General Assembly also have greatly assisted efforts to bolster the fiscal health of pension programs in recent years. Since 2020, they have used $10 billion from budget surpluses to make supplemental payments into pensions for state employees and municipal teachers. That’s in addition to annual required payments that currently approach $3.3 billion in the General Fund. 

“These returns highlight the impressive work of Treasurer Russell and his team in increasing investment returns,” Lamont’s budget spokesman, Chris Collibee, said Tuesday. “Gov. Lamont’s focus has been on building a sustainable Connecticut for the future. Every dollar in additional investment revenue is funds the state can use to cut taxes and provide more resources for essential programs like education, child care, housing, and social services safety nets.” 

Russell, a New Haven Democrat, said he has tried to make the office both “disciplined and forward-looking.” 

“Over the last several years, we haven’t just changed how the office works, we’ve changed who it works for. We’re ushering in a new era of fiscal responsibility, making significant payments on long-term debt that has allowed us to invest in the residents of Connecticut and begin to lift up communities across our state.” 

Russell also brokered a key compromise in 2023 between Lamont and the legislature that salvaged the Baby Bonds program, an initiative that invests long-term funds in Connecticut’s poorest children when they’re born to help finance educational and business opportunities later in life.

Keith M. Phaneuf is a reporter for The Connecticut Mirror (https://ctmirror.org). Copyright 2026 © The Connecticut Mirror.