New Jersey pension fund continues to show solid double-digit returns

Make text smaller Make text larger


The New Jersey Pension Fund has produced positive returns for fiscal year 2014 of 15.9 percent, according to preliminary data compiled as of June 30, 2014. The final return for the fiscal year is expected to exceed 16 percent once year-end valuations are completed for all investments.

This marks the fourth consecutive year of positive returns and the second year in a row that the fund has produced solid, double-digit returns. The New Jersey Division of Investment was scheduled to report the performance gain to the State Investment Council during its monthly meeting on July 23, 2014.

“Gains above the assumed rate of return have provided the fund with unanticipated additional assets of $6.1 billion for the fiscal year,” said State Treasurer Andrew Sidamon-Eristoff. “The two-year annualized performance of the fund is 13.8 percent, demonstrating that prudent yet innovative fiscal management of the fund realized strong returns for plan participants.”

The assumed, long-term rate of return is 7.9 percent.

“Our mission for the fund is to achieve the best possible rate of return at an acceptable level of risk,” said Robert Grady, chairman of the State Investment Council, which oversees the Division of Investment’s management of the fund. “When I became chairman of the SIC four years ago, the fund balance was $66 billion. Since then, it has achieved more than $35 billion in gains, including substantial payouts to retirees. Since that time, the fund has achieved an annualized rate of return of 11.9 percent for the four years ended June 30, 2014. Our policy of diversifying our investments has provided important benefits for the plan’s participants.”

During the past four fiscal years, actual annualized returns have provided the fund with an incremental $11.5 billion, or more than $2.8 billion per year, above the rate of return assumed by actuaries in calculating the funded status of New Jersey’s pension plan.

The Division of Investment and the State Investment Council have pursued a policy of diversification in investing the fund’s assets. The fund is now invested in large and small capitalization U.S. stocks, international stocks in both developed economies and emerging markets and a wide variety of fixed-income instruments that include investment grade bonds, U.S. Treasuries and high-yield bonds.

The fund’s asset allocation also includes various credit instruments and debt-oriented private equity and real estate funds as well as alternative assets, which can include hedge funds, private equity, real estate and commodities. About 25.2 percent of the fund, or $19.3 billion, was invested in alternative investments, as of Dec. 31, 2013. Comparable large public pension plans had an average of 31 percent of their funds invested in alternative assets, according to the Division’s consultant, Hewitt Ennis Knupp.

The New Jersey Pension Fund is in line with other public pension funds that use alternative investments as a diversification strategy. Out of 70 public funds studied by the Pew Charitable Trusts, 67 had some investments in alternative assets, according to a Pew report.

Other facts about the New Jersey pension fund:

Since June 30, 2010, the fund has distributed approximately $34 billion to beneficiaries.

The total value of the fund on June 30, 2010, was $66.9 billion. As of June 30, 2014, it stood at $80.6 billion based on preliminary, unaudited valuations.

Net inflows to the fund from contributions have totaled approximately $12 billion since June 30, 2010.

Therefore, since June 30, 2010, the fund has experienced gains and income through investments totaling more than $35 billion.

Make text smaller Make text larger


Pool Rules


Dentistry Expert Dr. Jason Rosenfeld, DMD: Dental Mouth Guards
Popular sports such as soccer, hockey, football, lacrosse, basketball, wrestling and martial arts require safety equipment. And most important of all are dental mouth guards.
Read more »

Local photographers show off their work at library
The new venue of the West Milford Township Library and Community Center was
a success for the West Milford Camera Club contest and exhibition, with many
new photographers...

Read more »

Elks announce winners of essay contest
The West Milford Elks held a Drug Awareness Essay Contest and had many winners, including one child who won at the state level. Each winner received $20 prize and state winner and...
Read more »

WM police investigate Macopin student after social media ‘threat’
West Milford police launched an investigation Thursday evening after a Macopin Middle School student...

Read more »


Subscribe to our mailing list

* indicates required
Community Newspapers


Local News
Elks announce winners of essay contest
  • May 26, 2018


West Milford, NJ