Home > News > Research > Moody’s: NJ State Lottery Pension Law “Slightly Positive,” More Work Required
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Moody’s: NJ State Lottery Pension Law “Slightly Positive,” More Work Required

Report indicates while the law is a step in the right direction, lottery floor covers 25% of state pension’s ARC.

By Chris Butera

New Jersey’s new lottery pension law is being considered a step in the right direction by Moody’s Investors Service, but it’s still not a large enough step to resolve the state’s issues with meeting its obligations to workers.

Moody’s the agency said the move is “slightly positive” for the state’s credit profile because it “all but removes the prospect of a complete pension contribution holiday going forward.” However, Moody’s points out that it will not change a whole lot for the system as the lottery floor only covers one-quarter of the state pension annual required contribution (ARC).

The lottery law—signed over the Fourth of July weekend as part of an agreement to end a brief government shutdown—transfers the revenue from the popular number-based games into the state pensions, helping decrease the risk of state officials skipping out on future pension payments.

Although the report has no impact on the state’s credit rating, Moody’s said that the law “reflects the state’s continued commitment to supporting its pension funds within the realities of its budget constraints.”

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The state plans to pay $2.5 billion in the current 2018 fiscal year, then increase annually until 2023.

The chart reflecting the state’s 2018 funding plan and Moody’s report can be viewed below.

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Home > News > Research > Virginia Retirement System Sees 12.1% Return for FY 2017
Research

Virginia Retirement System Sees 12.1% Return for FY 2017

Public, private equities help boost fund to historic high.

By Chris Butera

The Virginia Retirement System (VRS) posted a 12.1% return, net of fees, for fiscal year 2017, beating both the 11.8% policy benchmark and the 7% assumed rate of return, bringing the fund to a milestone $74 billion in assets.

For the period ending June 30, 2017, private and public equities—which consisted of $30.7 billion and $6.5 billion of the portfolio—returned 20.6% and 17.7%, respectively.

Real assets ($9.4 billion), returned 10.8%, followed by credit strategies ($13.1 billion) at 10.1%. The $1.8 billion strategic opportunities portfolio raked in 8.2% and fixed income ($12.4 billion) polished off the returns at 0.5%.

“In fiscal year 2017, most markets delivered robust returns,” the fund’s CIO, Ronald D. Schmitz, said in a statement. “However, we know market environments vary from year to year, and we will see returns above and below the 7% assumed rate of return. As a long-term investor, VRS focuses more closely on returns over 10-, 20- and 25-year periods and has exceeded the policy benchmarks for those periods, ending June 30, 2017.”

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VRS paid out roughly $4.5 billion in benefits to more than 199,000 retirees and beneficiaries in FY 2017.

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