The five New York City retirement systems returned an aggregate 10.3% in fiscal 2025, New York City Comptroller Brad Lander announced Wednesday. The plans exceeded the actuarial target of 7%, reducing New York’s required pension contributions by $2.18 billion over the next five fiscal years.
The comptroller’s office oversees the five New York City pension systems: the New York City Employees’ Retirement System, the Teachers’ Retirement System of the City of New York, the New York City Police Pension Fund, the New York City Fire Pension Fund and the New York City Board of Education Retirement System.
The five plans collectively manage $294.6 billion in assets, as of June 30, as follows: TRS $114 billion; NYCERS $92 billion; the police fund $56 billion; the fire fund $22 billion; and BERS $10 billion.
Collectively, the plans comprise the third-largest public pension system in the U.S. Over the past three, five, seven and 10 years, the New York systems returned an annualized 9.4%, 8.5%, 7.8% and 7.7%, respectively. According to the comptroller’s office, the five plans had nearly 800,000 beneficiaries as of November 2024.
For more stories like this, sign up for the CIO Alert newsletter. ?
As of June 30, the pensions allocated 27.4% of all assets to U.S. equities, 24.2% to core fixed income, 11.3% to developed ex-U.S. equities, 9% to private equity, 6.6% to high yield bonds, 6.2% to private real estate, 4.7% to both emerging markets and alternative credit, 3.1% to infrastructure, 1.5% to hedge funds, and 0.7% to both convertible bonds, cash and cash equivalents.
Investment returns in the last fiscal year were driven primarily by global and U.S. equities. These asset classes returned 16.2% and 14.7%, respectively, followed by infrastructure with a return of 11.9%, exceeding all other alternative asset classes.
Convertible bonds returned 10.1%, high-yield bonds returned 9.9%, alternative credit returned 9.5%, hedge funds returned 7.8%, core fixed income returned 6.2%, cash and cash equivalents returned 5.0%, private equity returned 4.5%, and private real estate returned 1.9%.
Of the pension system’s 10.3% annual return, four percentage points were attributed to U.S. equity returns, and another 1.8 percentage points were attributed to developed ex-U.S. equities.
“Our strong investment returns for the third consecutive fiscal year are a testament that our disciplined and prudent long-term approach that integrates responsible investing as a strategy to assess and mitigate portfolio risk is working to deliver wins for retirees and New York City,” Lander said in a statement.
The announcement noted that despite market volatility due to U.S. monetary policy and tariffs, the pension system was able to deliver performance that will safeguard the pensions of these plans’ beneficiaries.
“The investment portfolios of our five funds have continued to exceed the actuarial target,” said NYCRS CIO Steven Meier in a statement. “The rapidly shifting monetary policy and continued uncertainty throughout the market underscores the importance of a steady and long-term investment approach rooted in thoughtful diversification.”
Meier noted that the New York City pension system is focused on thoughtful portfolio construction and disciplined manager selection to continue to maximize the value of its portfolio.
The pension system also reaffirmed its commitment to achieving a net-zero portfolio. The comptroller’s office recently laid out a roadmap for NYCERS, TRS and BERS to achieve net-zero portfolio greenhouse emissions by 2040.
“Despite meritless attacks on responsible investing, the Comptroller’s office will continue to move strongly forward with its responsible investing approach,” the comptroller’s office stated in its release.
The comptroller’s office also highlighted $23.1 billion in commitments made in the 2025 fiscal year to minority- and women-owned asset managers, an increase of $6.3 billion from the prior fiscal year.
“I am incredibly proud of today’s results and the work of our talented Bureau of Asset Management team to generate strong returns and strengthen our funds for years to come,” Lander said in the statement.
Related Stories:
AustralianSuper Taps NYC Pension Deputy CIO
NYC Comptroller Vows to Stick With Climate Plan Amid Net Zero Exodus
NYC Pensions Sell $5B in Private Equity Secondaries to Blackstone
Tags: Brad Lander, New York City Comptroller, New York City Employees’ Retirement System (NYCERS)
#York #City #Pension #System #Returns #Fiscal