Despite posting its best return since 2004, New York State’s $132.6 billion pension fund is probably going to ask state workers to cough up more to make up for recent shortfalls.
The New York State Common Retirement Fund, which manages the nest egg for roughly one million state and local government workers, posted gains of 25.9 percent for the year ended March 31, State Comptroller Thomas DiNapoli announced yesterday.
It was the fund’s third best return in two decades, trailing only 2004, when the fund gained 28.8 percent and 1998 when it returned a whopping 30.4 percent.
But the booster shot performance is more than offset by past losses and an explosion in pension costs and won’t save government workers nor the cities that employ them that pay into the fund from forking over even more in coming years, DiNapoli warned.
“The negative performance we had last year will continue to be with us,” he said yesterday in a conference call to explain the results. “The good news is we had a very strong year. The bad news is we’re not back to where we were.”
Indeed, the nearly 26 percent gain still leaves the $132.6 billion nest egg down from 2006 levels when the pension reported assets worth $142.6 billion. The pension, the third largest in the nation, hit a peak of $156.6 billion in 2007 before being roiled by the financial tumult that unfolded amid the housing meltdown and ensuing financial crisis.
After falling a whopping 26.3 percent for the year ended March 2009, the fund’s assets plummeted to a mere $110.9 billion — levels not seen since earlier this decade.
DiNapoli’s spokesman Robert Whalen said any increase to contributions would be announced in September after the final numbers are tallied, and wouldn’t likely take place until 2012.
Boosting the fund over the last year were its US stock investments, which gained more than 50 percent compared to gains in the S&P 500 index of 45 percent for the same period. Fixed income holdings grew by 7.4 percent.
Dragging the fund down, its real estate portfolio — which has investments in New York properties such as 380 Madison Ave. and 299 Chrystie Street — lost 27.8 percent last year.