The New York State Common Retirement Fund earned an estimated 11.35 percent return on investments in the state fiscal year that ended on March 31, 2018, according to State Comptroller Tom DiNapoli, whose office oversees the fund’s investments.
The Fund ended the year with an estimated value of approximately $206.9 billion, compared to its value of $192.4 billion one year ago.
“The New York State Common Retirement Fund’s value rose with help from strong markets through most of the fiscal year, which ended with a volatile fourth quarter,” DiNapoli said.
“Fortunately, our conservative approach for gaining long term, sustainable returns protects the Fund in times of uncertainty.
The strength and stability of our state’s pension fund is good news for the more than one million individuals in the state retirement system and for New York taxpayers.”
DiNapoli was upbeat and optimistic about the health of the fund, and the state’s economy in general, when he addressed the Professional Firefighters Association in Albany earlier this month. Their members, like most of the public employees in New York, contribute to the fund each paycheck and take retirement and pension payments from it during retirement.
According to the comptroller, it is a challenging time for labor in the state, however the state economy is moving in a positive direction.
This is a change from when he spoke to the Professional Fire Fighters Association a few years ago and the budget was in a state of crisis after the recession.
The unemployment rate has dropped to 4.6 percent, which is half of what it was during the recession. About 850,000 jobs in the private sector have been recovered since then, though there is an ongoing challenge to bring back jobs to upstate New York.
“Overall, the budget I think puts us in good shape for the coming year,” DiNapoli said. “The real challenge for us is at the state level, it’s what’s gonna happen two years, four years, five years out.”
For the short-term he is confident in the pension funds for those retiring or already retired, however the long-term is more concerning. For the people just starting their career, who will retire decades from now, DiNapoli said he wants to ensure the Fund is on solid footing for the long term.
“The numbers continue to be good for the pension fund, we are concerned about the person who’s starting work today. We’ve got plenty of money for the retirees and plenty of money for you who are active employees,” DiNapoli said. “But it’s the firefighter today that will be retiring decades down the road that we’re thinking about, that’s really who we have to be investing for.”
In a 2018 PEW Research study using the most recent data from 2016 regarding the state pension funding gap, it showed that New York always ends up in the top-tier of the 50 states when it comes to how well the pension fund is funded. It is one of only four states that is over 90 percent funded.
The Fund provides retirement security to more than one million active state and local government employees, retirees and their beneficiaries. The Fund’s long-term expected rate of return is 7 percent.
“We have confidence in our asset allocation, we strive everyday to get good results but to also go about getting those results in the right way,” DiNapoli said. “So transparency and a sense about ethics and integrity are important to us and how we manage the pension fund.”