January 2012 Issue
December 22, 2011

ERS: How well do you know your fund?

Author: State Comptroller Thomas P. DiNapoli
Source: NYSUT United

As a member of the New York State and Local Retirement System, you've probably heard something about the Common Retirement Fund and may have wondered what its purpose is. The answer is very simple and straightforward: to safeguard the financial futures of retirement system members and pensioners such as you.

The system comprises the Employees' Retirement System (ERS), which was established in 1921, and the Police and Fire Retirement System (PFRS), which was established in 1967. The assets of both ERS and PFRS are held in the fund — the pool of money from which benefits are paid.

As an ERS member, it is important for you to be familiar with the fund. You should have an understanding of its purpose, its investment performance and how it impacts retirement system members. Here, then, is a brief primer on the fund:

Q: Who is responsible for the Common Retirement Fund?

A: One of my key responsibilities as New York State Comptroller is to serve as the trustee of the fund. As such, I am accountable for its performance, oversight and management. In my role as trustee, I utilize the counsel of an Investment Advisory Committee that provides me with insight, technical expertise and guidance concerning the fund. In addition, I'm supported by a staff of dedicated professionals in our Pension Investment and Cash Management Division who assist me in carrying out my role as fiduciary and sole trustee of the fund.

Q: What is the value of the fund?

A: As of June 30, 2011, the most recent available data, the estimated value of the fund was $146.98 billion. This was an increase of approximately $480 million over its value at the end of the fiscal year on March 31, 2011, and the highest it has been since the global economic downturn of 2008-09.

Q: Where do the fund's assets come from?

A: The fund's assets come from three main sources: member contributions, investment income and employer contributions. Over the 20 years from April 1, 1991, through March 31, 2011, investments have provided 83 percent of the fund's income.

Q: What kind of impact does the fund have on the economy in New York?

A: Whenever possible, the fund invests in enterprises, business ventures or companies that benefit New York's economy. For example, the fund's private equity portfolio includes investments in almost 200 New York state businesses with a value of $843 million.

In addition, as of March 31, 2011, there were 385,031 retirees and beneficiaries in the system, and approximately 77 percent remained New York state residents. As such, benefit payments nearing $6.5 billion in the last fiscal year alone reached the state's communities and businesses, representing the system's greatest impact on the state's economy.

Q: Where can I go to learn more information about the system?

A: Please feel free to visit our website at www.osc. state.ny.us/retire or contact us at 1-866-805-0990.