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New York's $178 Billion Pension Sees Returns Lag as Stocks Fall

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Tuesday, 14 Jun 2016 05:19 PM

New York state’s $178.1 billion retirement system eked out a 0.19 percent return for the year that ended March 31 as stock prices declined, falling far short of what it expects to earn on its investments each year.

The results for the New York State Common Retirement Fund, the nation’s third largest public pension, were the worst since 2009 and lagged the 7 percent annual returns that it counts on to pay benefits to more than 1 million state and local government workers, retirees and their beneficiaries. The gain compares with a median annual decline of 0.25 percent for U.S. public pensions with assets greater than $5 billion, according to Wilshire Associates Inc.’s Trust Universe Comparison Service.

“Despite weak equity markets, the fund’s diversified portfolio and our investment team delivered a positive return,” Comptroller Thomas DiNapoli said in a statement. “We continue to have confidence in our asset allocation for the long term.”

The failure to deliver the expected returns over the long-term can put pressure on governments by requiring them to increase their annual contributions to make up for lost ground. In the five years through March 2015, the fund posted average annual gains of 10 percent.

Over New York’s fiscal year, domestic and non-U.S. equities lost 0.54 percent and 8.54 percent respectively, DiNapoli said. Core fixed income returned 1.81 percent, while private equity and real estate returned 9.1 percent and 13.1 percent, respectively. The pension fund paid $10.9 billion in benefits during the fiscal year.


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New York state's $178.1 billion retirement system eked out a 0.19 percent return for the year that ended March 31 as stock prices declined, falling far short of what it expects to earn on its investments each year.
New York, pension, return, stocks
247
2016-19-14
Tuesday, 14 Jun 2016 05:19 PM
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