Public Employee Press

Pension system doing well, says Stringer

City Comptroller Scott Stringer gives the pension system - battered by the 2008-09 financial crash and two recessions - a clean bill of health.

In July, Stringer reported that the system ended fiscal year 2013 on June 30 with a record-high value of $160.5 billion, a gain of 17.4 percent for the year.

The gains reflect the strong growth of the five pension funds' stocks, bonds and other investments in the last five years, with the annual return averaging 13.7 percent, double the projected 7 percent.

"Five years of positive returns are good news for the pension funds and for the city," Stringer said, because the improved returns will let the city contribute less. He says the city can cut its contribution by $178 million in fiscal year 2016, $356 million in FY 2017 and more in 2018-2021.

The city retirement system includes funds for Police, Firefighters, Teachers, non-teaching school workers and other city employees, including most DC 37 members.

The system took a big hit in the 2008-09 financial crash, an 18.3 percent decline in its assets, and is about 60 percent underfunded. But Chief Actuary Robert North projects that the system should be fully funded by 2022.

Two years ago, he cut the projected return of the system from 8 to 7 percent, making the city raise its contributions. Workers' contributions will also increase because the Tier 6 pension system requires new employees to contribute during their entire careers rather than only for 10 years.

Commenting on the pension investments, DC 37 Associate Director Henry Garrido said the union wants the system to expand its shareholder activism.

"We should use our leverage as shareholders to change the anti-union behavior of some corporations," he said.