CAPITOL Public worker pension funds socked About 20% of value lost in 6 months BY MICHAEL VIRTANEN The Associated Press
New York’s public worker pension fund has lost about 20 percent of its value — almost $31 billion — since April 1, state Comptroller Thomas DiNapoli reported Tuesday. Despite the sharp decline in New York State Common Retirement Fund assets, DiNapoli said benefi t and employer contribution rates are set through March 2010 and won’t be affected. The fund, with major stakes in the declining stock market, was valued at $154 billion as of March 31, near its historic high. It had 677,321 active members and 358,109 pensioners and beneficiaries, paying out some $6.8 billion in benefits in the 2007-08 fiscal year. “Like every investor, the fund has felt the impact of the global credit crisis,” DiNapoli said. “The fund is built to survive fluctuations in the market, even ones as severe as the current downturn.” The fund lost about $30 billion within three years after the Sept. 11, 2001 terrorist attacks in Manhattan, falling to $95.6 billion in 2003 before recouping that lost value over the next two years. Domestic equities constitute about 37 percent of the portfolio, international equities 17 percent, real estate 6 percent, private equity 8 percent, hedge fund investments 3.5 percent, and fixed-income assets 28.5 percent. “Equities are the largest component,” said Robert Whalen, spokesman for the Comptroller’s office. The investment strategy is long-term, also intended to benefi t new workers who won’t retire for decades but are looking for market opportunities now, he said. DiNapoli announced in early September that the average contribution rate for state and local government employers would be 7.4 percent of payroll in 2010, down from 8.5 percent in 2009. The rate for police and fire departments would fall to 15.1 percent of payroll in 2010 from 15.7 percent in 2009. The New York State Teachers Retirement Fund saw assets decline to $88.5 billion as of Sept. 30 from $95.8 billion three months earlier, spokeswoman Heidi Brennan said. The fund has about 400,000 members and beneficiaries. Its targets are 42 percent domestic equity, 15 percent international equity, 10 percent real estate, 7 percent private equity, 18 percent domestic fixedincome investments, and 8 percent mortgages. The performance of New York’s funds is on a par with other states. “That seems to be in the range of what a lot of the pension funds are reporting,” said Stacey Mazer, senior staff associate of the National Association of State Budget Officers. She noted a Washington Post report showing similar declines in the public pension funds in Virginia, Maryland and California, like New York with a majority of their funds in stocks. Keith Brainard, research director for the National Association of State Retirement Administrators, said the benefit of the big pension funds over individual 401K funds is that they pool assets, lower costs, and take more chances than an individual can, spreading risk over a larger group with a range of ages. Short-term results like those reported Tuesday are less important, he said.
CAPITOL N.Y. pension fund takes 26 percent hit BY MICHAEL VIRTANEN The Associated Press
New York’s massive public pension fund lost more than 26 percent on investments during a fiscal year marked by Wall Street’s meltdown and the recession, state Comptroller Thomas DiNapoli said Friday. Benefits to roughly 350,000 retirees are secure, but state and local governments will have to pay more starting in 2011 to compensate for the diminished returns, DiNapoli said. The rate will rise from about 7.5 percent of payroll to roughly 11 percent, he said. Actual rates will be announced in September. “I don’t think anybody anticipated a down year like we’ve just gone through,” DiNapoli said. The fund was worth about $109.9 billion when the fiscal year ended on March 31, down from roughly $154 billion a year earlier, near its historic high. The comptroller is the sole trustee of the fund, which pays pension benefits to public workers. It is funded through payroll deductions that are invested nationwide. DiNapoli is proposing legislation to give local governments an option to spread out the bump in contributions, so rates won’t increase as much, but the higher rate would continue after the fund regained some ground. The New York State Common Retirement Fund has about 650,000 active members, but officials said the number of retirees has been growing with more baby boomers expected to stop working in the coming years. .............>>>>...............>>>>..................http://www.dailygazette.net/De.....amp;EntityId=Ar00801
The full effect of the market downturn and its impact on pension costs won't be felt in New York until two years from now because fund managers base what they charge governments on a five-year average. But when it hits - schools will feel it in the 2010-2011 school year and local governments a little later - it will be what some are calling a "pension tsunami," with a tab in the millions.
"You're talking about tax increases that could go, just for this alone, anywhere from a 5 or 6 percent increase all the way up to a 15 percent tax increase," said Fred Gorman, a founder of Long Islanders for Educational Reform, a watchdog group.
Coupled with the expected loss of federal stimulus money by then, "It is alarming," said Robert Lowry, deputy director of the New York State Council of School Superintendents. Last month's school budget increases were generally small because of the use of federal stimulus money.
Unlike most private retirees, New York public workers contribute to their pensions for only their first 10 years of employment. In addition, they receive cost-of-living increases and lifetime health insurance, pay no state or local taxes on their pensions and do not have to deduct an offset for for Social Security.
Who litigates this crap shoot??????? who is so short sighted, selfish, self-serving etc etc.....oh that's right-----our government is........and we let it have the wheel of this dilapidated bus..........
...you are a product of your environment, your environment is a product of your priorities, your priorities are a product of you......
The replacement of morality and conscience with law produces a deadly paradox.
STOP BEING GOOD DEMOCRATS---STOP BEING GOOD REPUBLICANS--START BEING GOOD AMERICANS
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