Tag Archives: One of America’s Largest Pension Systems

NYSLRS’ Membership by Tier

NYSLRS, comprised of the Employees’ Retirement System (ERS) and Police and Fire Retirement System (PFRS), had 652,324 members as of March 31, 2017. Our members are State, local government and school district employees from across New York, including 617,143 in ERS and 35,181 in PFRS. Eighty-one percent of our members are active, which means they were on a public payroll as of March 31.

As new public employees come on board and more Tier 3 and 4 members reach retirement age, Tier 6 is expected to represent the majority of NYSLRS members in a few years.

Tier 6 includes members who joined NYSLRS since April 1, 2012. In just five years, they’ve grown to more than 174,000 members, making up 26.7 percent of total membership.

Here’s a look at our membership by Tier, as of March 31:
NYSLRS' Membership
Tier 1: NYSLRS’ oldest tier, whose members first joined the system before July 1, 1973 (July 31 for PFRS members). Tier 1 now represents only one half of 1 percent of our membership. There are only 54 Tier 1 PFRS members remaining.

Tier 2: With 29,186 members, Tier 2 represents 4.5 percent of membership. More than 87 percent of Tier 2 members are in PFRS.

Tier 3&4: Tiers 3 and 4, which have similar retirement plans, represented nearly 90 percent of membership just seven years ago. The 392,699 Tier 3 and 4 members now make up 60 percent of the total. (Note: There is no Tier 4 in PFRS.)

Tier 5: Tier 5 covers members who joined in a period of a little over two years (January 2010 through March 2012). With 53,118 members, Tier 5 now represents 8.1 percent of membership.

Tier 6: This tier covers both ERS and PFRS members who joined since April 1, 2012. Its ranks have grown by nearly 29 percent over the past year.

A Look Inside NYSLRS

Want an inside view of NYSLRS and the New York State Common Retirement Fund (Fund)? Curious about how the Fund is managed and how well its investments are performing? Then check out the latest Comprehensive Annual Financial Report (CAFR).

The 2017 CAFR, which covers the state fiscal year that ended on March 31, 2017, is chock full of facts and figures that offer a detailed look at the Retirement System and the Fund. The biggest story is the financial health of the Fund. The Fund’s assets were valued at $192.4 billion at the end of the fiscal year (and continued to grow in the first quarter of new fiscal year). The average return on Fund investments was 11.48 percent, well above the long-term expected rate of return of 7 percent.

The soundness of NYSLRS was confirmed by several recent independent studies, which concluded that the New York State’s pension system is one of the best-funded public pension systems in the nation. And that means NYSLRS’ 652,324 members and 452,455 retirees and beneficiaries can rest assured their pensions will be there for them in retirement.

A Look Inside NYSLRS

The average pension for an Employees’ Retirement System (ERS) retiree was $23,026; the average for a Police and Fire Retirement System was $49,123. In all, NYSLRS paid out $11.3 billion in benefits during the fiscal year. (Fund investment earnings covered 75 percent of the cost of these benefits.) But NYSLRS pension payments don’t just benefit the system’s retirees and beneficiaries. Because 78 percent of NYSLRS retirees and beneficiaries live in New York, $9.1 billion worth of benefits stayed in the State. And that money supported local businesses, paid local taxes and generated economic development statewide.

An Award-Winning Publication

NYSLRS received a Certificate of Achievement for Excellence in Financial Reporting for the 2016 CAFR. The Certificate of Achievement is a national award recognizing excellence in the preparation of state and local government financial reports. NYSLRS has won this award for the last 13 years.

Retirement Fund Enjoys Strong Investment Returns

The New York State Common Retirement Fund (Fund) earned an estimated 11.42 percent on investments during the State fiscal year ending March 31, 2017, exceeding the long-term expected rate of return of 7 percent. The Fund ended the year with an estimated value of $192 billion.

Comptroller Thomas P. DiNapoli, Trustee of the Fund, credited the growth to a diversified investment strategy and strong returns on investments, particularly in the fourth quarter. Domestic and non-U.S. equities (stocks) performed particularly well, with an overall return of 17 percent. The return on real estate investments was nearly 11 percent. All returns are estimates, pending audited data that will be available later this year.

NYS Common Retirement Fund return on investments Fiscal Year 2017

The financial soundness of the New York State and Local Retirement System (NYSLRS) has been confirmed by two independent studies. A report by S&P Global Ratings ranked NYSLRS as the third best funded state pension system in the country for 2015. Only South Dakota and Wisconsin ranked higher. A study by the Pew Charitable Trusts also showed NYSLRS in the top three nationwide.

The Fund is the third-largest public pension fund in the country. NYSLRS provides retirement security to more than one million active state and local government employees, retirees and their beneficiaries. During the fiscal year that ended March 31, 2016, NYSLRS paid out $10.9 billion in retirement and death benefits. More than $8.6 billion was paid to residents of New York State, which generated local spending and provided economic support New York businesses and communities.

Investing in a Cleaner Future

Saturday is Earth Day. Since 1970, April 22 has been set aside as a day to draw attention to environmental issues. Today, 47 years after the first Earth Day, we face perhaps the greatest threat to the planet: climate change as a result of carbon emissions.

As trustee of the New York State Common Retirement Fund (CRF), Comptroller Thomas P. DiNapoli seeks sound and sustainable investments in strategies and companies that are developing and using low-carbon technologies.Comptroller DiNapoli's Sustainable Investment Strategy

The CRF’s investments in New York-based companies such as Crystal IS in Green Island and the High Sheldon wind farm in Sheldon are examples of low-carbon investment opportunities that provide solid returns for the Fund, create jobs and generate local tax revenues, while helping promote a lower carbon economy.

As an investor, DiNapoli continually seeks improvements in environmental practices and lower carbon emissions from the companies in the CRF’s portfolio. For example, he has asked Exxon­Mobil and other portfolio companies to explain how they can adjust their business model to meet the worldwide effort to limit global warming, and has urged the Securities and Exchange Commission to ask fossil fuel companies to explain how they are addressing climate change. The CRF has created a $2 billion public equity index that excludes or reduces investments in the worst carbon emitting corporations, and increases CRF’s investments in companies that are lower emitters. In addition, DiNapoli has increased the CRF’s total commitment to sustainable investments to $5 billion to take advantage of the growing low carbon economy.

The Comptroller’s sustainable investment strategy is crucial to the long-term health of the CRF. Addressing investment risks presented by climate change is a major part of that strategy. Rising seas, severe storms, floods and droughts are likely to disrupt the global economy. Moving toward a low carbon future reduces risk to the CRF’s investments, spurs innovation and opens new investment opportunities.

Links:

http://osc.state.ny.us/press/releases/feb17/022317.htm

http://www.bbc.com/news/science-environment-39329304

http://time.com/4082328/climate-change-economic-impact/

 

Welcome New Members

Welcome to new members of the New York State and Local Retirement System (NYSLRS).

NYSLRS is here to help you plan for a financially secure retirement. Your retirement may be far in the future, but decisions you make now will have a big impact on your later years. Here are a few things you should know:

How Pensions Work

A NYSLRS pension is a defined benefit plan. Under this type of plan, once you are eligible for a pension and apply for retirement, you will receive a monthly payment for your lifetime. Your pension benefits are determined by a preset formula set by law. However, many employees in the United States, particularly in the private sector, are enrolled in 401(k)-style plans. The ultimate value of a 401(k) plan is based on the contributions made and investment returns. While 401(k) plans and other individual retirement accounts are a way to supplement your pension and Social Security payments, they do not provide the same level of security as defined benefit plans. Unlike your pension, these plans do not guarantee a lifetime benefit. Learn more about how pensions work.

New Members Checklist

Service Credit

Your NYSLRS pension will be based on factors such as your tier, retirement plan, age at retirement, final average salary, and service credit. One year of full-time employment with a participating employer is equal to a one year of service credit. Part-time employment is prorated. You may also be able to buy service credit for previous public employment or military service, which in most cases would increase your pension.

Start Saving Now

Because having a defined benefit pension plan is only one part of building a financially secure future, it’s essential that you save additional money for retirement. State workers and employees of participating local governments can take advantage of the New York State Deferred Compensation Plan. You can start by having as little as $10 deducted from each paycheck. You may choose how your money will be invested from a variety of options. Because of how compound interest works, the earlier you start saving, the better off you’ll be.

More Information

You’ll find more information in our booklet Membership in a Nutshell. We also publish booklets about specific retirement plans. If you know which system you’re in (Employees’ Retirement System or Police and Fire Retirement System) and your tier, you should be able to find your plan. If you are not sure what plan you’re in, ask your employer.

Stopping Pension Fraud

Stopping Pension Fraud is a top priority of Comptroller Thomas P. DiNapoliSince taking office, New York State Comptroller Thomas P. DiNapoli has battled public corruption. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers.

Under the direction of Comptroller DiNapoli, NYSLRS has put in place a system of safeguards designed to prevent and identify potential incidents of pension fraud. One such safeguard uses data analytics to uncover and stop improper payments.

Post-Retirement Employment Violations

Our investigative efforts include a focus on post-retirement employment. New York State law restricts the amount of money public sector retirees can earn if they return to public service employment after retirement. The law permits public sector retirees under the age of 65 to earn up to $30,000 per year from public employment before their pension benefits are suspended.

As of this March, our review of post-retirement employment cases have uncovered more than $700,000 in benefit payments subject to recovery. For example, a former Newburgh City Fire Chief, who double-dipped by collecting $95,000 in pension payments while still working as fire chief, was federally convicted.

The “Muscle” in the Pension Fraud Fight

In some cases, the pension fraud NYSLRS uncovers gets referred to Comptroller DiNapoli’s wider umbrella program to root out public corruption and fraud involving public funds. The Comptroller’s aggressive initiative included partnering with federal, state and local prosecutors and law enforcement statewide, including DiNapoli’s groundbreaking “Operation Integrity” task force with Attorney General Schneiderman. To date, Comptroller DiNapoli’s various partnerships have garnered more than 130 arrests and $30 million in ordered recoveries.

NYSLRS’ partnership with DiNapoli’s “Operation Integrity” has resulted in the investigation, prosecution and recovery of stolen pension payments, exposing $2.75 million in pension fraud in recent years.

Here are some recent cases where pension scammers have been thwarted:

Comptroller DiNapoli and NYSLRS will not tolerate pension fraud. These arrests and convictions serve as warnings to those who might steal pension benefits: if you think you can steal the hard-earned benefits of NYSLRS members and retirees, you are gravely mistaken. When fraud is identified, Comptroller DiNapoli will work with law enforcement to hold the pension scammers accountable. The clear message to anyone who tries to defraud our pension system is that you will be found, and you will pay.

If you suspect someone of pension fraud, call the Comptroller’s toll-free Fraud Hotline at 1-888-672-4555, file a complaint online at investigations@osc.state.ny.us, or mail a complaint to: Office of the State Comptroller, Division of Investigations, 14th Floor, 110 State St., Albany, NY 12236.

What is the CAFR?

Last week, we published the latest Comprehensive Annual Financial Report (CAFR). This annual report gives a clear view about how both NYSLRS and the New York State Common Retirement Fund (Fund) are managed. This year’s CAFR covers our last State fiscal year, from April 1, 2015 through March 31, 2016.

The CAFR and Transparency

Each year when the CAFR is prepared, we strive to make sure the data is accurate, complete, and clear. For example, the financial section was prepared in keeping with accounting principles established by the Governmental Accounting Standards Board, and reporting requirements outlined by the Government Finance Officers Association of the United States and Canada. These principles set standards for financial accounting and reporting. By following them, we can see how we compare with other government entities using the same standards, ensure our data is consistent between accounting periods, and provide reliable financial statements to the public.

Comptroller DiNapoli is responsible for the Fund’s management. He ensures that investment policies and practices follow the highest levels of ethical conduct and transparency. The CAFR aids in transparency by providing historical data and extensive detail about the Fund’s audited assets, liabilities, investments, and transactions.

The CAFR provides many facts and figures about both NYSLRS and the Fund. Here are some statistics from the past fiscal year:

  • As of April 1, 2016, there were a total of 647,399 NYSLRS members; 612,294 in the Employees’ Retirement System (ERS) and 35,105 in the Police and Fire Retirement System (PFRS).
  • As of April 1, 2016, there were 440,943 NYSLRS retirees, 78 percent of whom live in New York.
  • As of April 1, 2016, there were a total of 3,040 participating NYSLRS employers.
  • The largest holdings in the Fund’s portfolio include:
    • Apple, Inc.
    • General Electric Company
    • AT&T, Inc.
    • Exxon Mobil Corp.
    • Microsoft Corp.
  • The Fund has invested approximately $9 billion with minority- and women-owned business enterprises since Comptroller DiNapoli took office in 2007.

This fact sheet (PDF) summarizes many other NYSLRS statistics you’ll find in the new CAFR. You can also find back issues of the CAFR on our website.

A Quick Look at the NYS Common Retirement Fund

Comptroller Thomas P. DiNapoli is the trustee of the Common Retirement Fund, which is the third largest public pension fund in the country. The Fund’s assets come from three main sources: member contributions, employer contributions, and investment returns. The Fund has two main goals:

  • Provide the means to pay benefits to NYSLRS’ participants; and
  • Minimize employer contributions through an investment program designed to protect and enhance the long-term value of the assets.

Over the last 20 years, 79 percent of benefits have been funded from investment returns. When you retire from NYSLRS, your monthly pension benefit—and the benefits of many others—will be drawn from this fund. Ethical management and a long-term, diversified investment strategy has made NYSLRS one of the best managed and funded plans in the nation.
Common Retirement Fund Assets

Strategic Long-Term Investments

The Fund’s investment program is designed to weather the ups and downs of an increasingly volatile global market. Our long-term target allocation for our investment portfolio is 22 percent in fixed income assets (bonds and Treasury Inflation Protected Securities [TIPS]) and 78 percent in equities, which includes:

  • Domestic and international public equities
  • Real estate
  • Real assets
  • Absolute return strategies
  • Mortgages
  • Private equity investments
  • Opportunistic funds

A diversified investment strategy helps us meet the funding needs for our current and future retirees while also helping to control risk.

The Fund is Well-Managed

An independent review of the Fund commended Comptroller DiNapoli and NYSLRS for strong policies and ethical management. By adhering to the highest standards of accountability and transparency, our members, retirees, and beneficiaries can be confident the Fund is being managed wisely.

The Common Retirement Fund: Invested In New York

As the third largest public pension fund in the country, the New York Common Retirement Fund (Fund) is in an excellent position to help strengthen the New York economy. One way it accomplishes this is by investing in New York businesses. Like all of the Fund’s investments, businesses are evaluated on their potential to earn a solid return for the Fund. Under New York State Comptroller Thomas P. DiNapoli’s direction, the Fund uses several programs to invest in New York businesses:

  • The In-State Private Equity Investment Program
  • The New York Business Development Corporation (NYBDC)
  • The New York Credit Small Business Investment Company (SBIC) Fund

By making money available through these programs, the Fund supports local businesses and creates jobs across the state.
The Fund—Invested in New York

The In-State Private Equity Investment Program

With the In-State Program, the Fund looks for companies in need of expansion capital. Businesses use the Fund’s investment to expand their operations and hire workers. The Fund has invested $820 million in over 300 New York businesses, with almost $325 million returned on exited investments. The companies in the In-State Program have also created or kept more than 4,500 jobs around the state.

The New York Business Development Corporation (NYBDC)

The Fund works with NYBDC to provide loans to small businesses in New York. These loans help small businesses buy property and equipment, expand, or start up. They also help create or retain almost 9,000 jobs each year. By borrowing from NYBDC, small businesses can receive lending terms that are often more favorable than other lending terms. Since the Fund partnered with NYBDC, they’ve loaned $362 million to 1,082 small businesses.

Invested in New York — Comptroller DiNapoli at Versa-Tel

Since teaming up with New York Business Development Corporation in 2007 to offer small business loans to returning military veterans, the New York State Common Retirement Fund has made nearly $1.5 million in loans to military veterans. On Veterans Day, Comptroller DiNapoli visited Versa-Tel, a veteran-owned telecommunications company based in Long Island, which received one of those loans.

The New York Credit Small Business Investment Company (SBIC) Fund

Last week, State Comptroller DiNapoli introduced a program that will make $200 million available for in-state investing. The SBIC fund offers credit financing to eligible New York companies, which provides another way to help smaller businesses expand their operations. The Fund is one of the first public funds to offer state-focused credit financing.

The Fund has New York’s best interests in mind by investing in local businesses and the result is two-fold: New York businesses receive the financing they need to succeed, and the Fund receives solid returns that get passed on to its members and retirees.

A Snapshot of NYSLRS

Each year, we publish our Comprehensive Annual Financial Report (CAFR) to explain how the Common Retirement Fund is managed and provide statistics about NYSLRS’ financial activities. This allows the public to see what we do behind the scenes to make sure the Fund stays well-funded and secure for the years to come.

NYSLRS by the Numbers

Retirees-in-US_Top-States The CAFR features many figures about NYSLRS and the Fund. At the end of the 2014–15 fiscal year, the Fund was valued at $184.5 billion. Prior to the recession, in fiscal year 2006–07, the value of the Fund was at $154.6 billion. Overall membership in NYSLRS is currently at 1,073,486, with membership being comprised of 643,178 members and 430,308 retirees and beneficiaries.

Of those 430,308 NYSLRS retirees, 78 percent of them — 337,406 — have chosen to live in New York. This is important because the pension money paid to retired state and local public employees flows directly back into our communities, stimulating and growing our local economies. During 2014, NYSLRS retirees were responsible for $12 billion in economic activity in New York State.

Here are some other facts you may not be aware of:

  • The state with the fewest number of NYSLRS retirees and beneficiaries is North Dakota, which only has 18 retirees and beneficiaries.
  • Florida has 35,014 retirees and beneficiaries, coming in second place to New York;
  • The county with the most retirees and beneficiaries is Suffolk County, with a total of 32,555. Erie County comes in second with 28,342 retirees and beneficiaries, and Nassau County comes in third with 21,947. The county with the fewest retirement and beneficiaries? Hamilton County with 411.
  • There are 717 NYSLRS retirees and beneficiaries who live outside the United States.

An Award-Winning Publication

NYSLRS received a Certificate of Achievement for Excellence in Financial Reporting for the 2014 CAFR. The Certificate of Achievement is a national award recognizing excellence in the preparation of state and local government financial reports. NYSLRS has won this award for the last 11 years.

You can check out CAFRs from past years by visiting our website at http://www.osc.state.ny.us/retire/about_us/financial_statements_index.php#cafr.