Pension fund losses deepen DiNapoli: Municipalities, school districts could face rate hikes BY MICHAEL VIRTANEN The Associated Press
New York Comptroller Thomas DiNapoli said Monday that losses are continuing in the state’s public worker pension fund, which lost about 20 percent of its value last year in the global financial meltdown, and rate increases are likely in 2011. DiNapoli said that after five years of rate cuts extending through 2010, municipalities and school districts could face contribution rate increases in future years if the downturn continues. He delivered the warning in a speech to school board members from across the state. The New York State Common Retirement Fund includes about 20 percent of public school personnel, including cafeteria workers and custodians, he said. Teachers have a separate retirement system. The fund stood at almost $122 billion on Dec. 31, down from $154 billion nine months earlier. DiNapoli said the preliminary analysis for January and February shows more losses, but he declined to say how much or project losses for the current quarter. DiNapoli said not all of the information about the performance of the fund’s private equity and real estate investments is available yet, but he believes those results will push the losses beyond 20 percent. “I anticipate a very significant loss,” the comptroller said of the fiscal year ending March 31. He didn’t estimate the amount. While he noted the continued weakness in the stock market, DiNapoli said, “we’re long-term investors, so we need to be invested in equities over time to get the kind of return that we need.” DiNapoli later told reporters he is “hoping for a great March. But if March is like January and February, I can’t give you a number off the top of my head, but it’s just going to be a worse hit than 20 percent, let’s put it that way.” In response to reports that Attorney General Andrew Cuomo is investigating suspected infl uence peddling by financial firms hiring lobbyists to gain access at the comptroller’s office, DiNapoli said he has an open-door policy. “That means if anybody wants to come in and make a suggestion to us we’re willing to look at it, and it has to go through our process,” he said. “Any suggestion that in any way our process is not one that’s rigorous or measures the investment decisions on the results is wrong, is nonsense.” He said his office posts transactions monthly. “Our process now is more rigorous than it’s ever been, more open than it’s ever been,” he said. He added that they’re always looking for improvements and a pension task force should have recommendations in a week or two. DiNapoli, who was appointed two years ago after ..............http://www.dailygazette.net/De.....amp;EntityId=Ar00100
You paid them to lose $1 billion State paid almost $50M to fund managers as pension fund lost big
By MICHAEL VIRTANEN, Associated Press First published in print: Monday, August 10, 2009
ALBANY -- New York recently paid almost $50 million to private stock managers to actively invest part of the state's massive public pension fund, and they lost more than $1 billion -- a worse performance than stocks that were essentially untouched.
And those were in good, or at least transitional, times. Those figures from 2007 to 2008 don't include last year, when Wall Street's meltdown forced investment losses almost across the board that added up to a 26 percent hit on the fund, one of the largest in the nation.
Final figures are due in a month, and preliminary data show international stocks on which the fund pays management fees leading the decline at about 45 percent, followed by domestic stocks at almost 38 percent, about one-quarter of those actively managed at a cost to the state.
"Obviously, you pay these guys to hopefully beat the benchmarks," said Dennis Tompkins, spokesman for the state comptroller's office. The fund changes managers, rotating some out based on performance, and is going through that process now, he said.
Fees for private managers, who try to beat stock index returns, are negotiable and often comprise a small fraction of the principal plus a percentage of profit. The New York State Common Retirement Fund had finished 2007 to 2008 with assets of almost $156 billion after retiree payouts.
That resulted from fixed income, real estate, securities, and private equity investments still generating returns and followed a few years of large stock gains. Between 2008 and 2009, only fixed-income investments were in the black, up 4.35 percent.
Over longer terms, returns for stocks that were managed were slightly higher than those for passive stocks over five years and slightly lower over 10 years.
Comptroller Thomas DiNapoli, the sole trustee, has established an internal study of the asset mix, with a report expected by year's end.
"We're pretty confident in the kind of diversification we have," said Robert Whalen, spokesman for DiNapoli. "It's in the difficult years you have to remind people of the good times. Through thick and thin, this is the model that's going to serve us best. That's what we've seen historically."..............>>>>...............>>>>...........http://www.timesunion.com/AspStories/story.asp?storyID=829452&category=BUSINESS
CAPITOL Governments face a big hit Pension fund payments to increase BY MICHAEL VIRTANEN The Associated Press
New York Comptroller Thomas DiNapoli said Thursday that state and local governments, and their taxpayers, will need to pay far more into the state’s public worker pension fund, which lost about 25 percent of its value in the global fi nancial meltdown. The government contributions will increase to 11.9 percent of payroll for most workers in 2011 and 18.2 percent for police and fi refighters whose pensions are more expensive. While the fund has regained some value with recent stock rebounds, public costs are expected to keep climbing. “We’re going to see more pressure for additional increases past this one,” DiNapoli said. “A lot of it’s driven by performance. It really depends on how we do this fiscal year.” The 2011 increases followed fi ve years of rate cuts as fund investments grew. The rates are set to drop next year to 7.4 percent of payroll that state, county and municipal governments pay for most employees, and 15.1 percent for fi refighters and police. The New York State Common Retirement Fund has about 350,000 retirees and 650,000 active members. It had $116.5 billion in assets at the close of its last quarter, down from the historic high of $154 billion in spring 2008. “It’s simply terrible news, a doubling of the pension rate at a terrible time,” said Stephen Acquario, executive director of the New York State Association of Counties. The counties paid $337 million in 2008, he said, with costs projected to rise to 24 percent of payroll by 2012. “That’s staggering.” DiNapoli said reform is needed to give taxpayers a break, citing the agreement Gov. David Paterson negotiated in June with the two biggest state worker unions to set new pension terms for new hires, including 3 percent employee contributions beyond 10 years. That accord with the Civil Service Employees Association and Public Employees Federation requires statutory changes. The Legislature has yet to enact them. That change would affect local governments also, Acquario said. Paterson said this approach will ..................>>>>........................>>>>......................http://www.dailygazette.net/De.....1&Continuation=1
If the New York State residents are responsible for covering the losses in the investments of the state pension fund, then the plan should only allow for the funds to be invested in low risk investments (government bonds, T-bills, etc.) with low to moderate returns.
When the fund was achieving high rates of return during the bull market, did the taxpayers share in the profits?
Where do we think THE STAR program will be diverted too.....it's just a matter of switches on a railroad.....right now NYS is the railroad to hell.......
...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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