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NY comptroller reports state pension fund growth

Michael Virtanen, Associated Press

ALBANY, N.Y. (AP) -- The New York pension fund for state and local government employees has grown to an estimated $150.3 billion with a nearly 6 percent return on investment this fiscal year, despite losses in international stocks, state Comptroller Thomas DiNapoli said Wednesday.

The fund, which had an audited value of $147.2 billion a year earlier, supported about 402,000 retirees and beneficiaries and has about 656,000 current members.

"The good news is in this very volatile market, this very volatile investment climate, that we now have three years of positive rates of return," said DiNapoli, the fund's sole trustee. In light of the volatility, especially overseas, he will look for more alternative and fixed-income investment opportunities, he said.

The New York State Common Retirement Fund had 27.5 percent of its assets in fixed-income investments like bonds and Treasury inflation-protected securities that overall returned 9 percent, according to the comptroller's office. Domestic equities, representing 38 percent of its holdings, returned 6.9 percent.

"We anticipate we will see steady growth in the U.S. market in the next few years," DiNapoli said.

The fund's non-U.S. equities accounted for 13.6 percent of the fund and lost 6.4 percent, while private equity investments returned 8.3 percent and real estate 17.6 percent.

He said the 5.96 percent estimated return for the year that ended March 31, lower than the fund's 7.5 percent anticipated rate of return, probably won't have a significant negative impact on new employer contribution rates. They will be announced this summer, though they are based on five-year averages that will remain affected by the national economic meltdown in 2008 and 2009, he said.

The fund dropped from its historic high of about $154 billion in spring 2008 to $110 billion a year later as the economy stopped growing and stocks tumbled. The average employer contribution rate is now 18.9 percent of salary for most public workers and 25.8 percent for police and firefighters.

At the same time, the proportion of workers to retirees has been shifting with retirement incentives, baby boomers exiting the workplace and a smaller public workforce. DiNapoli said they're following those trends and anticipating them in the actuarial assumptions for setting contribution rates.