DiNapoli: Rebound in investments boosts state pension fund

Michael Gormley

Newsday

Aug 11, 2020

State Comptroller Thomas DiNapoli on Tuesday said investments in the state pension fund showed “one of the strongest rebounds in modern history” after deep losses from the COVID-19 virus and the economic shutdown it forced.

DiNapoli said the rebound was strong in the state’s first fiscal quarter — April 1 to June 30 — and restored most of the lost value from the height of the virus and the closing of most private-sector commerce. The return on investments was 10.35% and the fund is now valued at $216.3 billion, up from $194.2 billion a month ago, DiNapoli said.

Still unknown is whether losses from the pandemic will force higher costs by state and local governments in their employer payments to the pension system. Last month, DiNapoli said an increase of some size was expected, but that was before the first quarter results were tabulated. A decision on whether the employer cost paid by state governments must increase, potentially triggering an increase in local property taxes, won’t be clear for weeks.

“Until there is a solution to the global public health crisis, market volatility and uncertainty will continue,” DiNapoli said. “We manage New York State’s pension fund to withstand tough challenges.”

DiNapoli said that 53% of the fund is in publicly traded equities, with the rest in cash, bonds, mortgages, private equity and real estate, among other investments.

Last month, DiNapoli reported that the economic shutdown reduced the state pension fund for public workers by $16.2 billion. The return on investment early in the pandemic dropped 2.68%, he said.