New York State pension fund reports investment gain for 2023-24, the second highest in 10 years

The value of New York State’s pension fund increased in the year ended March 31 because of stock market gains, particularly in shares of U.S. companies.

State Comptroller Thomas P. DiNapoli, the Common Retirement Fund’s sole trustee, said the investment return was 11.55%, the highest in three years and the second highest in the past decade.

The fund has a long-term target for total returns of 5.9%.

The state pension fund was valued at $267.7 billion as of March, or the largest sum in the past two years.

The 2023-24 gains follow an investment loss of 4.14% in 2022-23, which reduced the fund’s total value to $248.5 billion.

“Strong performance across asset classes helped drive the state pension fund’s investment returns higher over the past year, with many companies reporting better than expected earnings and consumer spending remaining strong,” said DiNapoli (D-Great Neck Plaza).

Nearly 27% of the fund’s assets were invested in U.S. stocks that produced an investment return of almost 29% last year. That was followed by global equities with a return of 24.29% and in which 3.44% of fund assets were invested.

DiNapoli said the pension fund owes benefits to 1.2 million state and local government employees, retirees and their beneficiaries. He said more than $16 billion in benefits were paid out in the year ended in March to nearly 522,000 retirees and their beneficiaries in New York State and elsewhere, according to preliminary estimates.

On Long Island, more than 66,100 people received a total of $2.6 billion.

The Common Retirement Fund is one of the largest of its kind, along with funds in California and New York City.

The state pension fund’s returns over time help to determine whether state and local governments must raise taxes to keep it fully funded as is required by the state constitution. Other factors include wage growth, inflation, age of retirement and mortality, according to DiNapoli.

The impact on employer contributions won’t be known for weeks. The new contribution rate is usually announced in late August or early September, and it can trigger an increase in property taxes.

In 2021, Nissequogue village increased taxes for the first time in four years, citing a hike in the pension contribution rate for village employees, among other reasons.

For the year ending March 31, 2025, rates increased from 13.1% to 15.2% of payroll for the Employees’ Retirement System and from 27.8% to 31.2% of payroll for the Police and Fire Retirement System.

“While inflation persists and global tensions pose risks to investors, the fund — thanks to its prudent management and long-term approach — is well positioned to weather any storms and continue to provide retirement security to the public employees it serves,” DiNapoli said this week.

By James T. Madore

james.madore@newsday.comJamesTMadore

James T. Madore writes about Long Island business news including the economy, development, and the relationship between government and business. He previously served as Albany bureau chief.