The New York City pension funds reaped investment returns of 12.3% in fiscal year 2013, which ended June 30, beating benchmarks and bringing their total value to approximately US$137 billion (C$141.6 billion)—the highest ever for a fiscal year-end.
The yield of 12.3% exceeded the combined and weighted average of the funds’ various asset class benchmarks by approximately 1%, according to preliminary unaudited numbers from the office of New York City comptroller John Liu.
The 2013 return of the city workers pension funds’ was preceded by three consecutive years of gains: 1.4% in 2012; 23.2% in 2011; and 14.2% in 2010.
The estimated annualized rate of return for the funds has been 9.5% under Liu, who assumed office in January 2010.
This figure has been 7.5% over the past 10 years; 7.8% over the past 20 years; and 9.3% over the past 30 years.
The funds currently have an actuarial assumed rate of return of 7%.
For the nine-month period ending March 31, 2013, the New York City pension funds were in the first quartile of the Wilshire Trust Universe Comparison Service ranking, the most widely accepted benchmark for the performance of institutional assets.
The funds’ consistent gains over the past four years not only ensure the retirement payments of city workers but also save taxpayers money, says Liu.
“The investment environment has been buoyed over the past 12 months by the Federal Reserve’s sustained and co-ordinated extraordinarily accommodating monetary policy, which has resulted in continued, though tepid, economic growth coming out of the recent recession,” says New York City deputy comptroller and chief investment officer Larry Schloss.
“New York City’s strong pension performance was primarily due to the rising U.S. equity market, our over-policy allocations and strong manager performance in U.S. equities and high-yield debt, and our underallocation to U.S. government and [Treasury inflation-protected securities] bonds,” Schloss explains.
Audited figures for fiscal year 2013, including final performance numbers for real estate, private equity and some asset classes that are currently measured as of March 31, will be available later in the fall, according to Liu’s office.
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