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Stock market gives city pension funds double the expected returns
The stock market was hot for the citys pension plans this year, bringing in double the expected returns on investments, according to city Comptroller Scott Stringer.
The citys fiscal watchdog Monday reported a 17.4% investment return for the 2014 fiscal year.
"The city will benefit significantly from the savings generated by these investment returns," Stringer said in a statement. "Any year in which the pension funds achieve double the assumed rate of return is a good one in my book."
The windfall is due to the makeup of the pension funds portfolio 60% is invested in equities, or a companys stock, according to Stringer spokesman Eric Sumberg.
The rest of the portfolio is diversified, including investments in real estate and hedge funds.
"A strong year in equities markets usually correlates to a strong year for the pension funds," Sumberg said.
Stringer said the haul means the city can save $17.8 billion between 2016 and 2035 due to smaller contributions to the pension plans, which cover municipal employees, teachers and education system workers, police and fire fighters.
In the 2016 fiscal year, the citys pension contributions would be cut by $178 million and $356 million in 2017, according to the comptroller. City pension plans are now valued at $160.5 billion, the highest ever recorded at the end of the fiscal year, according to Stringers office.