Hawaii’s largest public pension fund failed to meet its 7% investment target in fiscal 2019 amid a volatile December and unsettling U.S.-Chinese trade war.

The Employees’ Retirement System — which provides retirement, disability and survivor benefits to 124,089 active, inactive (vested) and retired state, city and county employees — finished the fiscal year that ended June 30 with a 5.8% gain.

The fund posted gains in three of its four quarters during the year, according to a recent report presented to ERS trustees by Meketa Investment Group. A 5.9% decline in the October-December period hindered the fund’s progress.

ERS Executive Director Thom Williams said he was happy with the results.

“I’m quite pleased with our portfolio return for the fiscal year,” Williams said. “There were periods of extreme volatility in the markets this year resulting in dramatic increases followed by comparable periods of decline. This ‘noise’ gets muted when we look at investment performance over longer periods of time.”

The ERS fund’s investments have averaged a 9.1% return over the past three years, 6.1% over the past five years and 9.2% over the past 10 years.

ERS assets climbed to an all-time high of $17.15 billion following a $524.6 million gain last quarter after accounting for contributions and distributions. The fund was up 3.2% for the final three months of the fiscal year. Broad growth stocks, which comprise 71.6% of the fund, rose 5.9% for the year.

Still, the fund is well below the total needed to meet future obligations.

The ERS fund had a $13.41 billion shortfall at the end of the 2018 fiscal year. Actuary Gabriel Roeder Smith is scheduled to release the fiscal 2019 results in January.

“While our positive return of 5.8% falls moderately below our long-term target, it keeps us on track to full funding within 25 years,” Williams said. “Our actuaries confirm that increased employer contributions and solid investment performance have combined to advance our schedule to full funding by about two years from where we were forecast to be just a few years ago.”

An actuary report released after the end of fiscal 2018 calculated that it will take 25 years, or until June 30, 2043, before the pension is 100% funded. As of June 30, 2018, it was only 55.2% funded, meaning it had just over half of what it needed to meet future pension obligations.

Williams repeatedly has said that beneficiaries should not worry about the shortfall due to pension reforms in place that eventually will eliminate the unfunded liability. Those pension reforms include increased contributions from employers, namely taxpayers, that are based on a percentage of an employee’s pay. The higher payments will cut into the shortfall in future years. Williams said the shortfall is expected to keep increasing for the near term until the higher contributions take hold.

Lawmakers passed legislation in 2017 to close funding shortfalls that were created partly due to existing unfunded liabilities, retirees living longer and lower projected investment returns.