State Comptroller Tom DiNapoli announced this week that New York’s pension fund had an estimated 5.96% increase in the 2011-12 fiscal year, with the value of the fund at $150.3 billion. The fund is still $6.3 billion below its level at the end of fiscal 2006-07, a period in which benefit payouts have risen nearly $3 billion.
The state’s pension fund has more than 1 million retirees and current workers and is the third-largest public pension fund in the nation. Comptroller DiNapoli is the fund’s sole trustee.
The problem – which the Comptroller does not highlight – is that the returns are lower than the 7.5% long-term rate of return sought by the fund. The assumed rate of return is a major factor in determining employer contribution rates. Since these are all public employers, they pass increases along to taxpayers which results in…higher local taxes.