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JOHN REITMEYER | JANUARY 26, 2017
New figures don’t negate fundamental funding problems, but they bring some good news for the beleaguered pension system
The board that oversees New Jersey’s beleaguered public-employee pension system received some good news yesterday as new figures showed overall investment returns finished ahead by about 7 percent last year.
While those returns didn’t live up to the 7.9 percent assumption that’s set in state law for the pension system, they marked a significant improvement over the year before, when investments generated less than 1 percent returns.
The new calendar-year figures also suggested a much better outlook for the pension system — which is deep in debt thanks to years of underfunding by the state — after figures released last year for the 2016 fiscal year showed negative returns for the first time in nearly a decade. (The fiscal year runs on a July 1 to June 30 schedule, mirroring the state budget cycle.)
The full dive into the 2016 calendar-year investment returns took place yesterday during a public meeting of the State Investment Council, the board that sets policy for the $72 billion pension system. State officials said the improvement largely occurred during the second part of 2016, with areas like equity and real estate leading the way after a poor start that included plummeting energy prices. They also released new figures for alternative investments like hedge funds and private equity that showed a slight increase in fees but an overall reduction in other costs like bonuses for performance.
By Samantha Marcus | NJ Advance Media for NJ.com
on September 28, 2016 at 6:07 PM, updated September 28, 2016 at 7:15 PM
TRENTON — The fiscal year that ended in June was a rough one for New Jersey’s public employee pension fund as it lost nearly 1 percent on its investments, state officials reported Wednesday.
The market value of the pension fund was $72.9 billion as of June 30, according to the Division of Investment, compared with $79 billion the same time last year.
Investment officials described the fiscal year as a challenging one in which the fund’s performance lagged as compared to other pension funds, as well as the benchmark the state holds itself up against.
“The one-year period ending on June 30th was a challenging and disappointing one for most investors,” said Christopher McDonough, head of the Division of Investment.
Tom Byrne, chairman of the State Investment Council, likewise described fiscal year 2016 as “an incredibly difficult investment environment.”
“You cannot expect outsize returns in an environment with such low interest rates and with equity markets at valuations that are high relative to historical data,” Byrne said at the State Investment Council meeting Wednesday.
SEPTEMBER 23, 2015, 7:20 PM LAST UPDATED: WEDNESDAY, SEPTEMBER 23, 2015, 9:37 PM
BY DUSTIN RACIOPPI
STATE HOUSE BUREAU |
THE RECORD
The investments made by New Jersey’s pension funds fell short of targets and well below the double-digit gains of recent years, but it still outperformed benchmarks, state officials said Wednesday.
And amid sustained criticism from unions and some legislators over increased spending on alternative investments – like hedge funds and private equity funds – the state’s investment returns were driven largely by those non-traditional accounts, officials said.
But the returns into the public employee pension fund aren’t enough to keep up with the flow of cash out every year to pay retirees, underscoring the need for greater contributions from the state, those officials said. Governor Christie has cut the state’s contributions the last three budgets amid declining revenues to the state, but his reduced payments compounded years of partial contributions to the fund by prior administrations, creating an unfunded liability today of between $40 billion and $80 billion, depending on the accounting source.
https://www.northjersey.com/news/nj-s-pension-investments-fall-short-of-targets-1.1416355
