N.Y. Retirement Fund Ends FY '08 With Positive 2.56% Return

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The New York State Common Retirement Fund ended fiscal 2008 with a positive return of 2.56%, Comptroller Thomas DiNapoli said yesterday.

"There will always be up years and down years in the market, but the diversification of the Common Retirement Fund helped us weather the economic downturn," DiNapoli said in a press release. "Our investment strategy isn't day to day, it's decade to decade, so we're prepared to handle downturns."

The performance is a steep drop from fiscal 2007, which had a positive return of 12.58%. It was also below the average consumer price index rate of inflation during that time, which was 3.28% according to the federal Bureau of Labor Statistics.

The $153.9 billion fund's domestic equity investments, which comprise more than 37% of the fund's portfolio, were down 6.44%. The other seven asset classes in the fund saw positive returns.

Citing data from Wilshire Associates' Trust Universe Comparison Service, the comptroller's office said that the median return for U.S. public pension funds during fiscal 2008 was 0.5%. The state's fiscal year runs from April 1 through March 31.

The state's public pension plan is the third largest in the United States.

DiNapoli did not release numbers on how the fund is doing in the current year, but said that it is fully funded despite a 7% increase in benefit payments to retirees and lower contributions from state and local governments during the last fiscal year. Next month the comptroller's office will release figures on required pension contributions.

The downturn on Wall Street has caused pain in New York City,which will have to increase its annual pension contributions by 9.9% to $6.1 billion in fiscal 2009 to make up for lower returns, according to DiNapoli's office. The city projected that its pension funds earned nothing in fiscal 2008, but the state comptroller estimated that they actually lost 4.8%.

Wall Street had near-record profits in 2006 totalling $20.9 billion but it lost a record $11.3 billion in 2007 and lost $22.4 billion during the first quarter of 2008, according to the comptroller's office.

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