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New York pension fund reaches a record $160 billion

ALBANY -- The New York pension fund for state and local government workers has topped $160 billion after reporting a 10.4 percent return on investment for its last fiscal year, the state comptroller's office reported yesterday.

The Common Retirement Fund's estimated value was $160.4 billion at the end of March, an all-time high for the fund that pays benefits to more than 413,000 retirees and beneficiaries, said Comptroller Thomas DiNapoli, its trustee. It has now restored all $44 billion lost during the recession starting in 2008 and added $6 billion more, largely from rebounding stock prices.

"It remains well-positioned for growth as the financial markets continue to gain strength," DiNapoli said. The 2014-2015 fiscal year starting next April will be the last with higher required employer contributions reflecting the recession losses, he said.

However, employer contribution rates will rise again before declining. The average employer contribution rate rose this year to almost 21 percent of salary for most public workers and nearly 29 percent for police and firefighters. "We have one more year of rate increases that local governments will have to pay," DiNapoli said. The increase, based on an actuarial study, will be announced in August and should be smaller than recent increases, he said.

The fund had 36 percent of its assets in domestic stocks, returning 14.5 percent for last year, and nearly 14 percent in international equities, returning 9.5 percent, according to the comptroller's office.

Its fixed-income investments, 28 percent of the portfolio, returned 4.9 percent. Real estate, accounting for 7 percent of the investments, returned 11 percent.

Private equity, composing almost 9 percent of the portfolio, returned almost 12 percent.

The remainder included global equities, returning 13.9 percent, and hedge funds, returning nearly 8 percent.

"We have had movement away from public equities because of volatility in the stock market," fund chief investment officer Vicki Fuller said.

An allocation plan established in 2009 calls for reducing combined domestic and international equities, now accounting for 50 percent of the portfolio, down to 43 percent, she said.

The fund's management is restructuring its operations with more emphasis on staff performing due diligence and underwriting on investments and less on outside consultants, Fuller said.

The fund holds the retirement savings of almost 650,000 employees, with 82 percent currently working, the comptroller's office said.

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