New York City Pension Funds

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Official reports estimate the five New York City Public Pension Funds are $56 billion in the red today, while other analyses based on more realistic projections of future returns point to an actual funding gap more than double the official figure.  What is driving this poor performance? A new report from ACCF looks at how politically motivated investments have harmed returns and forced taxpayers to pick up the tab.

  • According to their own numbers, the combined funds weighted average funding ratio stands at just 62 percent.
  • NYC’s Comptroller has increased the funds’ investments in initiatives that have historically underperformed, such as the Developed Environmental Activist asset class – a class that has underperformed the overall funds’ returns by an average of 600 basis points over the last three calendar years when full data is available.
  • Increased funds allocated to alternative investments has led to dramatic increases in management fees for all five NYC pension funds. Between fiscal 2014 and fiscal 2017, the Teachers Fund alone saw an 81.6 percent increase in management fees.
  • The NYC Comptroller submitted 92 separate shareholder proposals to 88 different companies in fiscal year 2017, despite few of these proposals being directly tied to improving the financial performance of targeted companies.
  • City taxpayers’ contributions to the pension funds have climbed from $1.4 billion in fiscal 2002 to $9.3 billion in fiscal 2017. Four of every five taxpayer-dollars collected by New York City personal income tax is spent paying down the city’s public pension fund system’s liabilities.

Read ACCF’s report – Point of No Returns: The Politicization of the New York City Retirement Systems — and check out the Infographic to learn more.