11/17/2016
The New York State Teachers’ Retirement System (NYSTRS) remains among the best-funded public retirement systems in the nation and it may be the best-funded teachers’ plan.
As of the most-recent actuarial valuation, the Retirement System was 104.1% funded using a market value of assets and 94.2% using an actuarial value of assets, the latter figure up from 92.9% the previous year. This information is among the many positive details found in NYSTRS’ recently released Comprehensive Annual Financial Report (CAFR) for the Fiscal Years Ended June 30, 2016 and 2015.
The System’s funding success is attributable to positive long-term investment returns coupled with the fact that NYSTRS has received uninterrupted employer and employee contributions throughout its nearly 100 year history. NYSTRS’ 30-year rate of return on investments is 8.86% and its 20-year return rate is 7.61%. Both exceed the annual assumed rate of return of 7.5%.
Since 1996, investment earnings have accounted for 84% of NYSTRS’ income.
With liabilities not due for 25 years or more, the System’s long-term returns are those most indicative of plan health. NYSTRS’ long-term returns indicate the System is sustainable. Another indication of sustainability: over the last 20 years System assets have nearly doubled despite paying out almost four times as much in benefits as was collected in contributions over the same period.
Other items of interest from the CAFR:
- Investments experienced appreciation of $258 million in 2016.
- Contributions collected from employers decreased by $0.6 billion.
- Benefits paid totaled approximately $6.7 billion, up from $6.5 billion in 2015. More than 80% of benefits are paid to New York State residents.
- NYSTRS administers its defined benefit plan cost effectively. Its investment fees average 24¢ per $100 managed compared to 60¢ or more per $100 managed for the typical defined contribution plan, such as a 401(k) or mutual fund.
Current and previous years CAFRs are found on the Annual Reports page of this website.