New York State Comptroller Thomas P. DiNapoli today announced that the New York State Common Retirement Fund (Fund) earned a 0.19 percent return on investments in the state fiscal year that ended on March 31, 2016. The Fund’s performance mirrored results in the broader markets during a volatile year. The Fund has an estimated value of $178.1 billion.
“Despite weak equity markets, the Fund’s diversified portfolio and our investment team delivered a positive return,” DiNapoli said. “We continue to have confidence in our asset allocation for the long term. Our investment team is focused on ensuring we remain one of the best funded and top performing plans in the country.”
Over state fiscal year 2016, domestic and non-U.S. equities lost 0.54 and 8.54 percent, respectively, which was consistent with the declines in U.S. and global equity markets. The Fund’s broader approach to fixed income markets over the last year was a positive, returning 2.26 percent in the TIPS portfolio and 1.81 percent in core fixed income. The Fund’s diversification strategy performed well, with private equity, opportunistic alternatives and real estate delivering returns of 9.12, 4.00 and 13.14 percent, respectively. Absolute return strategies were challenged during the year and a portfolio restructuring, focused on fee reductions and strategic market exposure, is underway.
The Fund is the third-largest public pension fund in the country and remains one of the nation’s best-managed and best-funded pension plans. The New York State and Local Retirement System provides retirement security to more than one million active state and local government employees, retirees and their beneficiaries. Over the last 20 years, 79 percent of benefits have been funded from investment returns. Employer and employee contributions cover the remainder of the benefits cost. Employer contribution rates are determined by investment results over a multi-year period along with numerous other actuarial assumptions, including wage growth, inflation, age of retirement and mortality. The Fund’s long-term expected rate of return is 7 percent.
The Fund’s value reflects $10.9 billion in benefits paid out during the fiscal year.
Strong returns in recent years have resulted in back to back consecutive reductions in employer contributions in fiscal years 2014-2015 and 2015-2016.
A graph showing the Fund’s value since 1993 is available here:
|Percent Returned||Percentage of Fund's Total Investments|
|Core Fixed Income||1.81%||20.2%|
|Absolute Return Strategies||-4.78%||3.4%|
|Non-Core Fixed Income||-0.07%||1.7%|
* Returns are estimated, pending audited data available later this year
** Treasury Inflation-Protected Securities