NY state pension fund assets reached $150 bln, close to 2007 peak

By Staff Reporter

May 24 2012, 15:05 PM EDT

New York state's pension fund assets rose 5.96 percent to $150.3 billion in the 2012 fiscal year, not far from the $154 billion peak set in 2007, the state's comptroller said on Wednesday.

Despite the improvement, the return remained below the assumed rate of return of 7.5 percent.

"Over the last three years, the fund has experienced strong gains during a period of economic instability," Comptroller Thomas DiNapoli said in a statement.

In 2009, the value of the pension fund fell to $108.9 billion in the midst of what DiNapoli called the "global economic meltdown".

Counties, cities and towns pay into the fund, and DiNapoli told reporters on a telephone conference call that he did not expect the latest results to significantly change the increase in contribution rates expected over the next two years to help make up for the losses in 2008 and 2009.

New York's pension fund, the nation's third largest, was funded at an unusually high level of around 90 percent in fiscal 2011. The funding level for fiscal 2012, which ended on March 31, is not yet available.

According to a recent study by the Center for Retirement research at Boston College, on average the ratio of assets to liabilities of 126 fund plans slipped to 75 percent in 2011.

Some 38 percent of New York's fund was invested in domestic equities, which returned 6.9 percent. Fixed income, 27.5 percent of the fund, returned 9 percent. Private equity had an 8.3 percent return and made up 9.6 percent of the fund.

Three categories lost money. Non-U.S. equities, which represent 13.6 percent of the fund, had a negative return of 6.4 percent. The hedge fund category, called Absolute Return Strategies, lost 2.4 percent and made up 2 percent of the fund. Global equities, which made up 2.9 percent of the fund, fell 0.5 percent.

DiNapoli said he did not expect to rebalance the portfolio of investments in light of the latest results.

"We have confidence in how our asset allocation has been set and we are sticking to it," he said, adding this mix was frequently reviewed.