NY pension fund balance rises, return falls

ALBANY -- New York's pension fund finished the last fiscal year with its highest balance since the 2008 market crash, but its performance fell below projections, state Comptroller Thomas DiNapoli reported Wednesday.

The fund's assets were valued at $150.3 billion as of March 31, $800 million more than a year earlier.

"The good news here is that the New York fund has posted positive returns for three consecutive years," DiNapoli said on a conference call with reporters. "This continues to demonstrate our fund is sustainable for the long term. We continue to be very strong in terms of liquidity and our ability to pay out our benefits."

The pension fund earned about a 5.9 percent return on its investments, falling below its target of 7.5 percent and below the 14.6 percent rate earned last year.

"It was a very volatile market and a very volatile investment market," DiNapoli said.

The effect on contribution rates for local governments that pay into the system won't be known until the summer, when a final actuarial report is completed, but rates are expected to rise, DiNapoli said.

The pension fund's value plummeted to $110.9 billion in fiscal 2009 from $155.8 billion and its return fell to negative 26.4 percent. The comptroller's office calculates contribution rates using a five-year average of the fund's performance, which spreads out the impact of market dips.

Standard & Poor's analyst David Hitchcock called the fund's below-target performance "slightly disappointing," but said that it was hard to assess the impact on the state until the final actuarial report. The fund's U.S. stock portfolio -- which is 38 percent of the fund's investments -- gained 6.9 percent and its fixed income portfolio -- 27.5 percent of the fund -- returned 9 percent.