Thu, Jul 7, 2011
John Liu Takes Credit For 20% Pension Return
BY Celeste Katz
Mayoral hopeful John Liu says his great leadership over city pension funds has generated a huge 20% return this fiscal year.
Our Reuven Blau reports:
The high returns reflect stock and bond market bounce backs from July 1st 2010 to June 30 — as well as a more diverse investment plan, the City Controller said.
“While the markets remain volatile, we have vigorously pursued a diversification strategy to enhance our returns while lowering pension costs to the city,” said Liu, who has not formally announced a run for mayor (yet).
Pension experts said the sudden windfall had little to do with any new diverse investment plan launched to mitigate against market fluctuations.
“God Almighty — spare me,” said a former city pension board executive. “I can’t imagine anything John Liu has done that has had an impact on the capital market.”
New York isn’t the only large pension fund to rake in big bucks over the past 12 months.
The country’s largest pension system in California is on pace for a slightly higher return, records show. The California Public Employees’ Retirement System earned 21.9% for its 1.6 million members, as of April 30. New York State’s latest return figures were not immediately available.
Despite the good news, city taxpayers are still on the hook for ballooning costs.
The city pension funds assume an 8% yearly rate of investment return. Anything below that number–as the case several times over the past decade–must be covered by taxpayer funds. City pension costs have skyrocketed from $1.5 billion in 2002 to a projected $8.4 billion this fiscal year largely due to increased city benefits and a torpedoed stock market in 2008.