NYSTRS Posts 23.2% Investment Return

(Nov. 3, 2011) – A robust total fund return of 23.2% net of fees for the fiscal year ended June 30, 2011 was the largest rate of return posted in 25 years by NYSTRS. The figure was nearly double the previous year's return of 12.1%.

The two consecutive years of double-digit returns helped the System regain much of the loss sustained during the devastating 2008-09 economic crisis. 

As of June 30, 2011, total net assets were valued at $89.9 billion, an increase of more than $13 billion from a year earlier. NYSTRS has achieved returns well above the 8.0% assumed rate of return in four of the past six years. The System's 25-year annualized rate of return stood at 9.0% — or 100 basis points above the actuarially assumed rate.  

According to an October report from the National Association of State Retirement Administrators, the median return for state and local government retirement systems with a fiscal year ending June 30, 2011 was 21.6%. The average 25-year return for these systems was 8.5%.

Despite the peaks and valleys of the financial markets in recent years, NYSTRS has remained fully funded. NYSTRS is widely considered one of the best funded public pension systems in the nation and possibly the best funded teachers' system.

The NYSTRS plan has also proven to be extremely efficient and cost effective. For the 20-year period ended June 30, 2011, NYSTRS collected $15.3 billion in member and employer contributions while paying out $63.5 billion in benefits. Despite distributing nearly $50 billion more than it took in, System assets rose from $31 billion to $89.9 billion.

Due in large part to the System's long-term investment success, the employer contribution rate has remained in single digits over this same 20-year period. In the 1990s the average rate was 5.66% and in the 2000s it was 4.37%.  The 11.11% rate applicable to 2011-12 payroll will be the first double-digit rate in 22 years.

For more information on the Retirement System's assets, investments and demographics, review the NYSTRS annual report for the fiscal year ended June 30, 2011.

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