New Jersey pension system earns 2.26 percent in 2012

Reuters News
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Posted: Aug 02, 2012 10:33 AM
New Jersey pension system earns 2.26 percent in 2012

By Hilary Russ

(Reuters) - New Jersey's $69.9 billion public pension system returned 2.26 percent in fiscal year 2012, falling short of its 7.95 percent assumed rate of return, the state said on Thursday.

The results, which the state stressed were preliminary, were released at a meeting of the New Jersey State Investment Council.

As state public pension funds across the United States began reporting their results for fiscal year 2012, many have largely missed their assumed rates of return compared with strong performances the year before. In the last 12 months, U.S. stock losses, combined with record-low interest rates, took a toll on the yield of financial assets.

Investments similar to that of the New Jersey pension fund, which the state uses as a weighted benchmark, returned just .25 percent in fiscal year 2012, which ended June 30, the state said.

In July, the $233 billion California Public Employees Retirement System, the biggest U.S. public pension fund, reported a 1 percent return for the year ended June 30, far below CalPERS' 7.5 percent target.

The $150.6 billion California Teachers pension fund, or CalSTRS, earned 1.8 percent. Various New York City pension funds reported an annual return of 1.7 percent, while Florida's $122.7 billion fund grew just 0.29 percent.

In New Jersey, the state's five main pension funds cover retirement benefits for about 769,000 participants.

The council is considering on Thursday several major possible investments, including putting $600 million into separate accounts at Och-Ziff Capital Management Group, a publicly traded hedge fund that also manages money for pension funds in California and Massachusetts.

(Reporting By Hilary Russ; Additional reporting by Michael Connor in Miami and Svea Herbst-Bayliss in Boston)