Q&A
Performance of NYC's pension funds
0:27:36
·
106 sec
Comptroller Lander discusses the current performance of New York City's pension funds and the factors driving returns.
- The pension funds are currently showing a return of 8.5% across all five funds for the fiscal year to date, exceeding the 7% actuarial target.
- The main driver of returns has been strong performance in public equities, which make up roughly half of the pension portfolio.
- Fixed income investments, comprising about a quarter of the portfolio, have not been performing as well.
- The remaining quarter of the portfolio is in private markets investments, including private equity, infrastructure, and real estate.
- Lander notes that the pension system uses a 5-year smoothing period for returns, which helps stabilize the budget impact of performance fluctuations.
Justin Brannan
0:27:36
Well, talk about the pensions.
0:27:37
You mentioned, in your testimony the, re the city's retirement funds are at a return of is it 8a half across all 5 pension funds?
Brad Lander
0:27:49
Fiscal year to date, and, obviously, what really matters is where we are at June 30th, and that's, I don't know, 38 days from now.
0:27:56
But, yes, right now, performance across the five systems is 8.5%.
0:28:03
I have the number for each system if you want.
0:28:05
They hover around 8.5.
Justin Brannan
0:28:06
The actual auto target's 7%.
0:28:08
Right?
Brad Lander
0:28:09
That's right.
Justin Brannan
0:28:10
So that's great.
Brad Lander
0:28:11
It is great.
0:28:12
Yes.
0:28:12
And, you know, one nice you know, that'll but we have a very wise, slow rolling system.
0:28:18
So if we were to end the year at 8.5%, I think each half percent is worth, like, $5,500,000,000.
0:28:29
Let me not we not you know?
0:28:30
But it gets rolled into the budget over a 5 year smoothing period, which is really helpful when we have a a a year in which we underperform.
0:28:40
But, yes, it's a it's a strong sign of our our Bureau of Asset Management and the Pension Funds team.
0:28:47
Returns have been good.
0:28:48
We just adopted a new strategic asset allocation across all 5 funds that takes advantage of the legislation we got passed in Albany last year, giving us a little more room to invest in private markets investments.
0:29:01
Yesterday, we made this wonder we announced this wonderful investment that NYSERS is making, along with, Community Preservation Corporation and related in the preservation of 35,000 rental units that were put at risk by the Signature Bank collapse.
0:29:17
So we you know, yes.
0:29:18
The returns are strong, and the broader responsible investing program is strong as well.
0:29:21
I wanna
Justin Brannan
0:29:22
ask you a little bit about that announcement, but could you tell us, what are some of the drivers of the the pension system returns?
