Markets buoyed New York State's pension system in fiscal '18

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Strong overall markets helped New York State’s pension fund in the 2018 fiscal year.

New York State Comptroller Thomas DiNapoli announced Thursday that the nation’s third largest public pension fund earned an estimated 11.35% return on investments and ended the fiscal year on March 31, 2018 with a value of roughly $206.9 billion. The Fund’s value, which is still subject to change once returns are fully audited, jumped $14.5 billion from the $192.4 billion it numbered at the end of 2017.

“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 in a statement. “Fortunately, our conservative approach for gaining long term, sustainable returns protects the Fund in times of uncertainty.”

DiNapoli said the fund’s public equities, which include domestic and non-U.S. holdings, saw overall returns of 15.03%. He said the fund’s diversification strategy was also successful with private equity and real estate delivering returns of 18.70% and 9.0%, respectively. The fund also took a broader approach to the fixed income markets to create a 2.14% return, according to DiNapoli.

A new report from Pew Charitable Trusts released in April showed that New York had the fourth most funded state pension system in the nation at 91%. The only other states with at least 90% funding ratios were South Dakota at 97%, Tennessee at 94% and Wisconsin at 99%.

DiNapoli, who first became the state’s chief fiscal watchdog in 2007, initiated quarterly performance reporting by the fund in 2009 as part of an effort to increase accountability and transparency. The Fund’s long-term expected rate of return is 7%,

“The Fund ended the fiscal year just as it began it, as one of the best funded, best managed pension plans in the nation,” DiNapoli said. “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.”

Healthy net pension liabilities have contributed to New York State achieving high investment grade credit ratings. The Empire State’s general obligation bonds are rated Aa1 by Moody's Investors Service, and AA-plus from S&P Global Ratings, Fitch Ratings and the Kroll Bond Rating Agency.

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Public pensions New York