NY Pension Considers Lowering Return Assumption Due to “Problematic” Investment Climate


Comptroller Thomas DiNapoli – the sole trustee of the New York Common Retirement Fund – said this week he is considering lowering the fund’s assumed rate of return.

The fund’s annual return assumption currently stands at 7.5 percent; it was lowered from 8 percent in 2010.

The nationwide average sits at 7.68 percent, according to NASRA.

More from the Journal-News:

Comptroller Thomas DiNapoli said the $176.8 billion pension fund, the third largest in the nation, is considering lowering its 7.5 percent average return assumption amid uncertain times on Wall Street.


“I think moving forward the investment climate continues to be very volatile and problematic. So certainly we have always been, on the scale of public funds, conservative,” DiNapoli said in an interview this week with Gannett’s Albany Bureau.

“If we do lower that assumed rate, that would certainly be a conservative approach. And one that I think would be reasonable,” he continued.

Still, a lowered rate of return would likely mean higher contribution rates in the short term for municipalities, who were burdened by growing retirement costs after the recession in 2008 and 2009. This year is the first time in the last five years the state lowered rates for municipalities.

DiNapoli said his office would need to consider a variety of factors in determining whether to lower its expected rate of return. In New York, the comptroller is the sole trustee of the pension system.

“Whether or not we’ll lower it and by how much is what we are pondering right now,” DiNapoli said. “The stock market can’t stay up as high as it has forever. I think being a little more conservative would be prudent.”

The Common Retirement Fund is the third-largest pension fund in the country, and manages $176 billion in assets.


Photo by Awhill34 via Wikimedia Commons

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