NY Pension Investment Gains a Boon for Governments
Pension fund hits a record high
Investment gains at New York's pension fund are giving state and local governments some breathing room, according to new numbers from Comptroller Thomas DiNapoli.
DiNapoli announced Tuesday that the contribution rates paid by state and local governments for their employees' pension costs will decrease for fiscal year 2015-16. The average rate will decrease from 20.1 percent of salary for most public workers to 18.2 percent. For police and firefighters, the employer rate will drop from 27.6 percent of payroll to 24.7 percent.
The reduction comes after the state's pension system hit a record high of $180.7 billion following a 3.6 percent return on investment in the most recent quarter. For the fiscal year that ended March 31, the fund reported a 13 percent return on investment.
"Our goal is to keep a smart investment strategy," DiNapoli told The Associated Press on Tuesday. "We're well-funded, and our fund is strong."
The state's pension plan is now 92.2 percent funded. That's an increase from 88.7 percent, and it puts New York well above funding levels in most states.
In 2012, only six states - Oregon, Washington, North Carolina, Tennessee, Wisconsin and South Dakota - had funding levels of 90 percent or more, according to an analysis by Standard and Poor's. More recent numbers for all 50 states aren't yet available.
The level represents the percentage of a pension fund's total obligations that are funded. It is viewed as a critical indicator of a state's pension system.
New York's pension system had a funding level that exceeded 100 percent before the downturn. It fell to 87.3 percent in 2012 before rising again.