NY pension fund down $44B since last year - The Business Review (Albany):

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The fund is now $109.9 billion—$44 billio smaller than it was onMarch 31, 2008, the end of the state’sx previous fiscal year. The fund’s rate of retur n was -26.3 percent. “It was the worsgt year in anybody’s DiNapoli said at a press conference. “sA loss over the year of 26 percent is a startling DiNapoli blamed the decline on the domesticstockk markets, which plunged last fall as majofr investment banks closed, filed for bankruptcy protection or were acquired. Up to 70 percent of the fund may be investedcin equities, either domestic or Last April, the fund was valued at $153.9 By October 2008, the fund was valuer at $123.
1 billion, a 20 percent decline. So far this year the fund has droppeed an additional10 percent, or $12 billion. “Wee weathered the storm better than many of our DiNapoli said. “We’re perpetualo investors, and we’ll continue to pursue sounr investments.” The pension fund has 1.04 million members and payingout $6.8 billion in benefits last It remains one of the largest public pension fund in the nation, behind a couple in California. The fund’s continuinhg decline will not jeopardize anypension benefits, DiNapolk said.
It also will not immediately impact the pensiomn contribution rates paid bylocap governments, since rates are set a couplde years ahead of time. February 2011 will be the first pension paymeng from localities with highercontribution rates, as a result of the stocko market’s shake-up. “It should be no surprise that thedecline we’re facing will result in contribution rate increases,” DiNapolji said. This year, DiNapoli is seeking to raised statutory limits on how much the pension fund can invesin so-called “alternative” investments, such as real private equity and hedges funds. Currently, 18.5 percent of the fund is investec inthose areas.
More investments in alternatived sources could help soften the blow of any future declinesx indomestic equities, DiNapoli said. “Over alternative categories have benefitedthe fund. And there are some opportunities out there where we do have constraintsdon us,” DiNapoli said. DiNapolii remained optimistic aboutthe long-term health of the pensiom fund, citing its recovery from the dot-com bust and 11, 2001, terrorist attacks as an The fund bounced back to hit a record-highu value of $154.6 billion in Marcu 2007. “As a pension fund, we have a perpetual horizon.
Our asset allocation makes the assumptioj that there will bedown years,” DiNapoli “A panic mode or short-term mode approach, over that is not the best strategy.”