New York Pension Fund Hits Historic High

0:00 Speaker 1 Sunday morning. What us today is Tom DiNapoli, the controller of the State of New York, who has done a terrific job for so many years. Well, Tom DiNapoli, how how many years have you ever been controlling?

0:12 Speaker 2 Now? Oh? Nineteen, John nineteenth anniversary this year.

0:16 Speaker 1 That is wonderful And tell us, I mean you’ve always done a great job for that and you’re almost a bipartisan the person that I’ve never heard anybody say bad thing about you. Tell us how our pensions are going for New York State.

0:32 Speaker 2 Well, I appreciate you saying that, John, because you know, the Controls Office has to be above the day to day politics, and we try very hard to keep it that way. Great news on the pension phone. We released this week our estimated value as of the end of the calendar year twenty twenty five, and we are now

0:48 up to a two hundred and ninety seven point eight billion dollars and historic high. So we’re benefiting from the market staying very very strong. We value our fund on March thirty first, John, So we still have a ways to go to see what our actual final number will be, but at the rate we’re going, we’re certainly headed for

1:07 a double digit positive return. I certainly hope that holds up between now and the end of March. Keep in mind, though our payments are significant. Actually last year we paid out sixteen point eight billion dollars in benefits to New York retirees, So our payots are getting higher, but the fund continues to grow, and that’s the strength of our

1:26 diversified portfolio.

1:28 Speaker 1 So I mean I got a good markt arithmatics. If you paid out sixteen megan on three hundred billion, sixteen billion on three billion, it’s about a little more more than five percent. So that means anything you earn above five percent, you’re building up a reserve exactly right.

1:45 Speaker 2 And John, you know, we have a more conservative assumed rate of return. So our assume rate of return is five point nine. We think that’s a more realistic number. Many pension funds have a much higher assume rate of return and they often have to make riskier investment choices to try to get that higher return. By having that

2:04 five point nine, we really have been able to maintain a virtually fully funded pension plan. You know, many states that have real issues with their finances. You look at a state like Illinois, in past year’s Jersey. It’s often because they have significant unfunded pension liabilities. That’s not something we’ve allowed to happen in New York, and so we’re

2:24 able to send up those pension checks, secure the retirements of our retirees today and the ones that are going to retire in the near future, and still grow the fund.

2:34 Speaker 1 Tom, there’s so many people that put pressure on state controllers and for politics. Have you been able to avoid being involved in a political upheaval.

2:46 Speaker 2 Well, I always remind everyone our obligation is to secure the pensions and the retirement benefits of our one point two million members, and we can’t manage the pension fund based on the politics of the day. You’re absolutely right.

2:59 We have people calling upon us to divest from this, divest from that. It’s interesting. It’s usually not where to invest, it’s where where not to invest, And we always try to do the responsible thing with where we’re putting our money.

3:11 If there are companies we’re invested in where perhaps we’re not happy with all their corporate practices, we do press them, we do engage with them, But at the end of the day, our moral obligation is to the retirees and by extension, John, but the taxpayers as well, because those pensions are funded by employee contributions, government contributions, which is

3:31 taxpayer dollars, and of course the investment return. And you look back historically about seventy five percent of how we pay for these pension benefits, this is from our investments. But we still have to keep as our first priority managing the fund for the benefit of the members, getting the best return consistent with what our long term goal is.

3:51 We have to keep the politics out.

3:53 Speaker 1 I agree with you one hundred and ten percent. And well, Tom Denapoli, nineteen years you’ve done a terrific job, and thank you for what you do for New York City, new York State, for New York State pensions, and God bless you, and God bless America, and you certainly have my vote.

4:11 Speaker 2 Oh, thank you, John. You’ve been a great friend, and thank you for what you do to always inform New York Is about what’s happening out there.

4:17 Speaker 1 God bless and have a great rest of the weekend. Thanks