#NYS pension fund shot up a record 33 percent during COVID-19 pandemic

The COVID-19 outbreak was a boon to Wall Street and the main pension fund for state government workers and retirees in New York state.

The value of the New York State Common Retirement Fund skyrocketed by a record 33.5 percent — from $194.3 billion to $254.8 billion, state Comptroller Tom DiNapoli reports.

The historic increase in investment returns occurred during the fiscal year running from April 1, 2020 to March 31, 2021 — the period when the pandemic ravaged New York, leading to safety shutdowns of businesses and massive unemployment that ravaged Main Street.

The record return is good news for local governments, which are required to cover a portion of the pension costs of their retired municipal workers. Higher fund investment returns means lower contributions are required for employers.

The pension fund paid out $13.7 billion in retirement and death benefits last year.

Local government or employer contribution rates are determined by investment results over several years to avoid dramatic fluctuations when the pension fund loses money.

“The state pension fund rode the market rebound from the depths of the pandemic and enjoyed the largest one-year investment return in its history,” DiNapoli said.

“This outsized return reinforces the Fund’s position as one of the strongest in the nation, but it comes with a caution. Markets remain volatile and as unpredictable as ever. With our talented investment staff, I will continue to manage our state’s pension fund with prudence and a focus on stable, long-term results that ensure continued retirement security for our members for generations to come.”

The retirement fund had 52.82 percent of its assets invested in publicly traded equities at the end of the last fiscal year. The remaining assets were invested in more conservative cash, bonds, and mortgages (23.14 percent), private equity (10.57 percent), real estate and real assets (8.24 percent) and other alternative assets 5.23 percent).

The Fund’s long-term expected rate of return is 6.8 percent.

By comparison to the pension fund’s fat investment returns, New York’s economy and workforce are only slowly emerging from the modern-day plague that killed more than 50,000 residents.

The unemployment rate in New York City, for example, is a stubborn 11 percent.