NJASA

New Jersey Public Pension Funds Had a 16.4% Return in 2019

Over the past several years, the public pension funds of the State of New Jersey have been criticized for their lack-luster investment returns and their poor over-all funded status.  But the tide may be changing.  In an article in NJ.com in late January, Director Corey Amon of the New Jersey Division of Investments, citing a 16.4 percent investment return, called the preliminary pension investment returns for the 2019 calendar year “unequivocally strong.”

The article by Samantha Marcus of NJ Advance Media was posted on January 29, 2020. It read as follows:

“New Jersey‘s pension fund for state and local government employees on Wednesday reported a 16.4 percent return on investments in 2019.

New Jersey Division of Investment Director Corey Amon told the State Investment Council Wednesday the preliminary returns for the calendar year have been ‘unequivocally strong.’  The State Investment Council oversees New Jersey’s $80 billion public-worker pension fund.

Global stocks, which make up nearly half of the fund’s portfolio, were the best performing asset class, up nearly 27 percent last year, Amon said.

‘Global stocks led the way in a very strong return environment. With nearly half the portfolio in global stocks, that was the key driver of calendar year returns in excess of 16 percent for the pension fund,’ he said.

For the fiscal year beginning July 1, the pension fund has so far recorded a 4.93 percent return.

The public pension fund is among the worst-funded in the U.S. but has been improving as the state increases how much money it contributes each year.  Investment earnings play a big role in the health of the fund, as well.

The public pension system assumes the fund will return 7.5 percent over the long run.  It closed out the last fiscal year on June 30 at 6.27 percent.  And the annual return over the past 15 years is 7.06 percent, according to the Division of Investment.

Private equity, U.S. stocks and real estate have routinely performed best for the pension fund in recent years.”