New York Does Not Expect to Meet 6.8% Fiscal Year Target

The New York State Common Retirement Fund (NYSCRF) does not expect to meet its 6.8% target for its 2019 fiscal year because of the coronavirus, according to a fund spokesperson.

The state fund was on track to meet its target just last month. The plan was up 7.3%, to an estimated $225.9 billion in December from an audited $210.5 billion in April, according to its third quarter report.

But the retirement system is ending its fiscal year in March, just as panic from the coronavirus has pummeled markets. The plan will present its results in the coming weeks.

“The market slide is hurting everyone’s value,” Anastasia Titarchuk, chief investment officer at NYSCRF, said in an emailed statement last week. “We don’t see a market recovery of the size needed in the next few days that would reverse the losses of the last weeks.”

Want the latest institutional investment industry news and insights? Sign up for CIO newsletters. 

The majority of public pension plans end their fiscal years in June or December, according to the Center for Retirement Research at Boston College. Only a small number end theirs in March, like the New York fund.

The retirement system, which had a 96% funded ratio as of March 2019, is one of the nation’s strongest plans. Titarchuk said the plan, which has increased its allocation to fixed income in the past year, is built to withstand the volatility of the markets.

“These are unprecedented and challenging times,” she wrote. “That said, we’re long-term investors and at some point markets will recover.”

The New York state pension plan is not the only one struggling with its portfolio. Last week, California Public Employees Retirement System (CalPERS) CIO Ben Meng warned his board that rates in the largest state pension in the US are falling short of their strategic allocation targets. The California pension ends its fiscal year in June.

It’s another example of the disruption that the coronavirus pandemic has inflicted on public retirement plans, as domestic markets have fallen 27% from their previous highs.

Workers and officials at state pensions are teleconferencing board meetings, canceling group counseling sessions, and working remotely. On Tuesday, the California State Teachers’ Retirement System (CalSTRS), the second largest fund in the nation, said it will not be mailing physical statements of direct deposits for benefits.