Category Archives: Pension System

News and information about the Pension System

Common Retirement Fund Earns Strong Investment Returns

The New York State Common Retirement Fund (Fund) holds retirement investments in trust for more than 1 million New York State and Local Retirement System (NYSLRS) members. In the State fiscal year ending March 31, 2018, it generated strong investment returns of 11.35 percent. The Fund ended the year with an audited value of $207.4 billion.

New York State Common Retirement Fund Value

Strong Investment Returns

Independent studies regularly confirm the financial soundness of NYSLRS. Just this year, a study by the Pew Charitable Trusts ranked NYSLRS among the best-funded state retirement systems. In fact, a new State fiscal year 2018 report from our actuary ranks NYSLRS at 98 percent funded, which puts us well above the national average of 66 percent funded.

Comptroller Thomas P. DiNapoli, trustee of the Fund, credits the growth to a long term, diversified investment strategy and solid market growth through most of the fiscal year, despite a volatile fourth quarter

Investing for Retirement Security

The Fund is the country’s third-largest public pension fund. NYSLRS provides retirement security to more than 1 million active state and local government employees, retirees and their beneficiaries. During the fiscal year that ended March 31, 2018, NYSLRS paid out $11.45 billion in retirement and death benefits. More than $9.8 billion of that went to residents of New York State, which generated local spending and provided economic support to New York businesses and communities.

Investing Responsibly

While successfully providing financial security for New York’s government workers and retirees, Comptroller DiNapoli’s has also put investment dollars to work helping New York businesses grow and addressing the long-term threat of climate change.

The In-State Private Equity Program invests in New York-based business ventures, companies and other programs that spur economic growth and create and retain jobs. Recently, Comptroller DiNapoli raised the program’s total commitments to $1.6 billion. Since 2000, it has returned $863 million on $583 million invested in 139 transactions.

And recently, the Asset Owners Disclosure Project once again named the Fund as the number one U.S. pension fund — and the third globally — for its work to address climate risk. The Fund’s portfolio includes $7 billion dedicated to sustainable investments, including $4 billion in a low emissions index that shifts stock holdings away from the biggest carbon emitters.

Protecting the Pension System

Protecting the Pension SystemSince taking office, New York State Comptroller Thomas P. DiNapoli has fought against the abuse of public funds. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers.

To date, DiNapoli’s investigations of retirement fraud have led to 24 arrests and the recovery of nearly $3 million in retirement funds. Here are some cases from earlier this year:

Woman Pleads Guilty to Theft of Dead Mother’s Benefits

A Madison County woman pleaded guilty to a felony grand larceny charge for collecting $67,000 of her dead mother’s NYSLRS pension checks. When her mother died in 2009, Tammy Banack did not inform NYSLRS or her bank, and her mother’s pension checks continued to be deposited in a joint checking account. Banack agreed to repay the stolen pension benefits and received five years’ probation.

Man Pleads Guilty to Stealing Pension Checks

A Brooklyn man was arrested for cashing over $22,000 of his mother’s NYSLRS pension checks after she died. Jimmie Buie pleaded guilty and was sentenced to up to three years in prison. He was also ordered to repay the money. The office of New York State Attorney General Eric T. Schneiderman assisted in this case and the Banack case.

Town Clerk Admits Faking Retirement Benefits

Following a review of monthly retirement reports, the Office of the State Comptroller discovered that a town clerk had been unlawfully using a town computer to inflate her retirement service credit. Springport Town Clerk Deborah Waldron pleaded guilty, resigned and paid fines and surcharges. Her actual hours and benefits were recalculated to ensure she does not receive extra money she did not earn.

Brother Guilty of Bank Larceny in Pension Scheme

Joseph F. Grossmann, a former Albany resident, pled guilty to Bank Larceny after he used fake documents and other schemes to collect $130,624 in his deceased sister’s name. He was sentenced to three years of probation (including one year of home confinement) and ordered to pay back the money.

To learn more about how Comptroller DiNapoli safeguards public funds, and how you can help, visit the Comptroller’s Fighting Public Corruption page. You can also read about past pension fraud investigations.

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.

New Report Questions Retirement Readiness of U.S. Workforce

Fewer Americans are participating in employer-sponsored defined benefit and defined contribution plans. In fact, according to a recent report from the New School’s Schwartz Center for Economic Policy Analysis, from 1999 through 2011, 53 percent of working Americans were not enrolled in a retirement plan at work — down from 61 percent. When you add in people who did not participate in a plan offered to them or who were not working, 68 percent of working-age people (25-64) did not participate in an employer-sponsored plan.

According to the report, because of these low retirement plan enrollment numbers, 55% of U.S. households nearing retirement may have to rely on Social Security income exclusively for financial survival in retirement.

The Dwindling Number of Defined Benefit Plan Participants Fare Best

The report, entitled Are U.S. Workers Ready for Retirement? Trends in Plan Sponsorship, Participation and Preparedness, was released in April and co-authored by Theresa Ghilarducci, a nationally recognized expert in retirement security. It found that of working-age Americans with an employer-sponsored retirement plan available to them, only 16 percent had a defined benefit plan, while 63 percent had a defined contribution plan such as a 401(k).

In a comparison of net worth, the households who are enrolled in a defined benefit pension plan fare the best, with a median net worth of $116,973, compared to $107,250 for those in a defined contribution plan, and $4,450 for those without an employer-sponsored plan of any kind.

Regrettably, as bleak and discouraging as this picture is, things could still be worse.

Too Many Future Retirees Face the Possibility of Poverty

According to the report, 33 percent of current workers aged 55 to 64 are likely to be poor or near-poor in retirement based on their current levels of retirement savings and total assets. While a sizable share of the retiree population will be at risk of living in poverty in all states, workers in Massachusetts and Virginia are more likely to enjoy a secure retirement than their counterparts nationally, with only 22 percent of workers 55 to 64 likely to be at-risk for a poor standard of living in retirement.

It’s a much more troubling story here in New York where 32 percent of near-retirement workers may experience poverty or near-poverty in retirement based on their current savings levels.

Comptroller DiNapoli’s Position On Retirement Security

New York State Comptroller Thomas P. DiNapoli, the administrator of the New York State and Local Retirement System (NYSLRS), has long addressed the topic of retirement security and said that policy makers and the community-at-large should be directing their energies to ensure retirement security for everyone, including workers in the private sector.

Comptroller DiNapoli discusses this issue in remarks he delivered last June during a Retirement Summit at the Schwartz Center.

Income Inequality and Pension Reform

Is the shift away from defined benefit pension plans hurting more than helping?

Today’s pension reform means increasing employee contributions, cutting pension benefits, and switching from defined benefit (DB) plans to defined contribution (DC) plans. In fact, according to a new study from the National Conference on Public Employee Retirement Systems (NCPERS), 15 million additional workers would have defined benefit plans if there had not been a trend over the past 30 years to convert pensions into defined contribution (DC) plans. However, there may be a hidden cost to this approach. As these reforms negatively affect plan participants and beneficiaries, income inequality appears to increase.

In the study, NCPERS looks at the growing debate between DB and DC plans. Those in favor of DC plans claim that DB public pension plans aren’t sustainable and taxpayers can’t afford to pay them. Others defend DB pensions, arguing the pension benefits are a type of deferred compensation and not the responsibility of taxpayers. Regardless of what side of the debate you’re on, here’s the hard reality:

  • In a DB plan, the employee receives a lifetime benefit based on years of service and salary.
  • In a DC plan, there’s no guarantee the employee will have enough or any retirement income upon retirement.

Income Inequality Worsening for Seniors

Despite the positive aspects of DB pensions, the trend against them continues, and the effects could be damaging. Several studies mentioned by NCPERS point out the reduction of retirement benefits and the shift away from DB pensions increase income inequality—even poverty—in the elderly. One study from the National Institute on Retirement Security (NIRS) found that poverty rates in senior citizen households without pensions were almost nine times higher than those with pensions.Income Inequality: The Elderly Poverty Rate is 9 times greater with no defined benefit income

The Economic Impact of NYSLRS Retirees

These are startling findings, considering the important role of pensions and retiree spending in the economy. In the US, retirees spend almost $838 billion each year, which employs millions of Americans and tens of millions indirectly. For every dollar paid in pension benefits, there’s $2.37 in economic output. In New York, retirees play an important role in the state economy. New York State and Local Retirement System (NYSLRS) retirees generate $11.3 billion in economic activity by spending $9.6 billion in the state. The pension benefits earned by NYSLRS retirees flows directly back into the local communities and economies.

As more negative changes affect DB pension plans and retiree benefits, the decrease in retiree spending will be felt throughout the economy.

“Personal income loss has a ripple effect, and everyone suffers when income inequality rises and economic growth weakens,” said NCPERS President Mel Aaronson. “Spending by retirees is vital to communities, yet local spending can easily be undermined by shortsighted changes to defined benefit pension plans.”

New York State Comptroller Thomas P. DiNapoli, Administrator of NYSLRS and sole trustee of the Common Retirement Fund, has often said that DC plans would put more people at risk in their retirement years. During an editorial board meeting of The Syracuse Post Standard last October 20, he also maintained that switching to a defined contribution plan won’t change the state’s obligation to provide a pension to the 1 million people already in the system. “A 401(k) was never meant to be the substitute for a pension,” DiNapoli said.

Protecting the Pension System

Since taking office, New York State Comptroller Thomas P. DiNapoli has fought against the abuse of public funds. One of his top priorities is to protect the New York State and Local Retirement System (NYSLRS) from pension scammers. With the help of New York State Attorney General Eric Schneiderman, DiNapoli has restored $6 million to the pension system.

Earlier this year, they charged a Polk County, Florida woman with the theft of $120,000 from the pension system. The woman didn’t notify NYSLRS about her uncle’s death, and took out the pension benefits paid to his bank account for 12 years.

“Attorney General Schneiderman and I will continue our partnership to protect public money, including the retirement funds that so many New Yorkers depend upon,” DiNapoli said.

Here are some other pension scamming cases from May:

Defendant Accused of Stealing Deceased Mother’s Benefits

A New Jersey woman allegedly stole over $162,000 in pension benefits. According to the Comptroller and Attorney General’s Office, she failed to notify NYSLRS of her mother’s death. As a result, she continued to receive her mother’s benefits for six years even though her mother didn’t list her as a beneficiary.

If convicted, she could face up to five to 15 years in state prison.

Man Accused Of Stealing Deceased Godfather’s Retirement Benefits

A New Jersey man allegedly stole $78,000 in pension benefits payable to his godfather. When his godfather died in 2003, his godfather’s wife collected the benefits until her death in 2006. The man did not notify NYSLRS of their deaths, and used his power of attorney to access their bank account. He withdrew the pension benefits for six years.

If convicted, he could face up to five to 15 years in state prison.

Double-Dipping Retiree Owes Almost Half a Million Dollars

A retired police officer will repay $456,647 to NYSLRS. From 1996 to 2012, the retiree received a pension while earning a full-time salary at a public community college. Even though he knew of the retiree earnings limit, he exceeded it and didn’t report his public income to the state.

The retiree forfeited all future pension payments he would have earned, and will use them to pay back his debt.

If you want to learn more about how Comptroller DiNapoli safeguards public funds, visit the Comptroller’s Fighting Public Corruption page.

New AARP Study Finds More Than 25% of New York Baby Boomers Aren’t Confident They’ll Ever Retire

According to the findings of a new American Association for Retired Persons (AARP) report, 27 percent of individuals who are 50 years-of-age or older and currently working in New York State are not confident they will ever be able to retire. More than half of those surveyed say their retirement will be delayed for financial reasons, and 26 percent said they do not have any access to a retirement savings plan through their employer. What’s most alarming is that out of those confident they will retire, 60 percent said they’d be likely to leave New York after retiring.

“Retirement security is eroding day by day,” said New York State Comptroller Thomas P. DiNapoli, one of the panelists at last month’s Boomer Flight Conference sponsored by AARP and City and State in Albany. “Failure to act now will only make the problem worse for the baby boomers and the generations to follow.”

Watch more of the Comptroller’s remarks from the Boomer Flight Conference.

Boomers Help Stimulate the New York Economy

AARP reported that baby boomers retired from New York’s workforce would deliver $179 billion a year to the state’s economy. According to research done by AARP and Oxford Economics, the total economic impact of New York’s 50 and older is nearly $600 billion, supporting 53 percent of the state’s jobs and 44 percent of the state taxes. But AARP also revealed that if 60% of working boomers headed out of state, they would carry with them over $105 billion annually.

New York may still have a chance at retaining the boomer population, if improvements are made. Out of those surveyed by AARP, the following said they’d be more likely to stay in New York as they age if the following areas were improved:

  • Health (77 percent)
  • Housing (70 percent)
  • Transportation (66 percent)
  • Jobs for older residents (61 percent)

“Without a long-term strategy on retirement security,” DiNapoli continued, “we risk condemning an increasing percentage of hardworking New Yorkers and Americans to poverty in their senior years.”

2014 State of the 50+ in New York State (Full report, PDF)

The New York Common Retirement Fund – A Long Term Track Record of Investment Success

The New York State Common Retirement Fund (the Fund), has a solid track record of exceptional long-term market performance. The Fund’s historical success is principally due to a sound investment strategy that is based on the Fund’s asset allocation and diversification.

The objective of the Fund, which is the third largest public pension fund in the country, is to achieve long-term growth, while meeting the cash flow needs to pay benefits to the New York State and Local Retirement System (NYSLRS)’s 422,405 retirees and beneficiaries and to meet the needs of future retirees. To accomplish this, New York State Comptroller Thomas P. DiNapoli has implemented a diversified investment strategy designed to meet current funding needs and future growth requirements while controlling risk.

How Pensions are Funded

The Fund’s assets come from three main sources: member contributions, employer contributions and investment earnings. Over the last 20 years, from April 1, 1993 through March 31, 2013, 80 cents of every dollar paid in benefits has come from investment earnings.

The Fund’s Investment Strategy Is The Key

Investments are made in a well-balanced variety of assets classes, which include global equity, domestic equity, core fixed income, real estate, private equity and absolute return strategies portfolios as well as Treasury Inflation Protected Securities.

The sound investment framework provided by the Fund’s asset allocation and diversification strategy enabled it to generate a 13.02 percent rate of return on its investments during the 2013-14 fiscal year. As of March 31, 2014, the Fund was valued at $176.2 billion. Since 2009, the Fund has seen five consecutive years of investment earnings growth. Prior to the recession, in fiscal year 2006-07, the value of the Fund was $154.6 billion.

For more detailed information on the Fund, visit the Division of Pension Investment and Cash Management.

The Fund – Strength Through Strategy

The New York State Common Retirement Fund (the Fund) holds assets in trust for all NYSLRS members and retirees. As trustee, State Comptroller Thomas P. DiNapoli is accountable for the performance and management of the Fund and ensures that investment policies and practices adhere to the highest levels of ethical conduct and transparency. Comptroller DiNapoli seeks the input of a wide-range of internal and external advisors to determine the best allocation of assets and investment choices for the Fund.

The Fund also relies on an extensive network of outside advisors, consultants and legal counsel to provide the Comptroller with independent advice and oversight of all investment decisions. Outside advisors and internal investment staff are part of the chain of approval that must sign off on all investment decisions before they reach the Comptroller for final approval.

An independent review released in February 2013 found that the Fund is one of the most transparently and ethically managed public pension funds in the country. The review also found that the Fund is well run, invests effectively on behalf of its members and operates with industry-leading openness.

Vicki Fuller is the Chief Investment Officer of the Fund, and as she notes in this video, the Fund has remained strong for the NYSLRS members and retirees who depend on it. The consistent performance of the Fund can be attributed to a long-term investment strategy and asset allocation policy that balances a maximum level of return with an appropriate level of investment risk.

For more detailed information on the Fund, visit the Division of Pension Investment and Cash Management.

For extensive historical data and detailed information about how the Fund is managed, visit the Comprehensive Annual Financial Reports section of our website.

Infographic showing size of NYSLRS in three groups: ERS, PFRS, and Pensioners.

A Quick Look at NYSLRS, One of America’s Largest Pension Systems

An Important Historical Footnote

NYSLRS’ membership ledger (1921) showing Thomas Cantwell as the first entry.

NYSLRS’ membership ledger (1921).

Thomas Cantwell’s name might not ring a bell for the average New Yorker, but his place in New York history was cemented long before he passed away on July 20, 1931 at the age of 91.

Born on December 18, 1839, Cantwell worked for the New York State Insurance Fund from 1890 through 1916, after which he became a file clerk for the New York State Office of the State Comptroller, retiring on July 1, 1921. At the time of his retirement, he earned $2,400 per year, which is the equivalent of $31,410 today. His retirement benefits amounted to $1,076 per year, or $14,435 today.

As you’ve guessed by now, Cantwell was the first member of The New York State and Local Retirement System (NYSLRS) and his membership marked the start of a timeline that has stretched more than 90 years.

Key Facts and Figures about NYSLRS Today

Picture of the first NYS Comptroller and the current NYS Comptroller Thomas P DiNapoli

New York’s first State Comptroller, Samuel Jones (1797), pictured left, and New York’s current State Comptroller, Thomas P. DiNapoli (2014), pictured right.

One of the America’s largest pension systems, NYSLRS is comprised of the Employees’ Retirement System (ERS), which was established in 1921 and currently has more than 612,294 members, and the Police and Fire Retirement System (PFRS), which was created in 1966 and has more than 35,100.

The fiduciary and administrative head of the pension system is New York State Comptroller Thomas P. DiNapoli. The Comptroller acts solely in the best interests of the System’s members and retirees and ensures that the 346 different benefit programs offered by NYSLRS are managed properly and effectively.

ERS provides service and disability retirement benefits, as well as death benefits to employees of participating public employers in non-teaching positions, exclusive of New York City. This includes uniformed services personnel, such as correction officers and sheriffs.

PFRS provides service and disability retirement benefits, as well as death benefits to police officers and firefighters who work for participating public employers, exclusive of New York City.

In addition to members, there are more than 440,900 pensioners and beneficiaries in the System bringing the total to more than 1,088,342 participants, as of March 31, 2016.

NYSLRS’ Core Purpose Remains

NYSLRS’ mission hasn’t changed since the days when Mr. Cantwell was working. Whether we’re talking about that inaugural class of 1921 or the more than one million members and retirees of today, NYSLRS seeks to fulfill New York State’s promise of secure retirement benefits to enable members, retirees and beneficiaries to plan for a more financially secure retirement. Perhaps most important of all, as a NYSLRS member or retiree, your pension system benefits are guaranteed under the New York State Constitution.