NJ pensions: See what’s happened to fund for retirees

John Reitmeyer, Genesis Obando | October 1, 2021 | Budget
The investments saw nearly 30% growth. How does that stack up over the last two decades?

Investment returns for New Jersey’s public-worker pension fund hit nearly 30% during the last fiscal year, the fund’s best investment performance in two decades.

Those high returns, fueled by Wall Street’s long-running hot streak, helped push the fund’s value above $94 billion, the highest valuation recorded in the last two decades, according to the Department of Treasury.

The big upswing in investment performance that occurred during the 2021 fiscal year, which closed at the end of June, came at the same time state policymakers have been increasing contributions to the pension fund after years of those payments being slashed or even skipped entirely. That helped the pension fund take full advantage of the recent booming market conditions.

State law requires the pension fund to assume it will return 7.3% annually from its professionally managed investments. Those returns bolster contributions that come in regularly from public employees and from the state and other taxpayer-funded government employers.

Despite the recent hot streak, some projections suggest investment returns for public pension plans will fall back to earth coming out of the coronavirus pandemic.

With New Jersey recently committing to making its full annual actuarially required pension contributions, that could put new pressure on taxpayers to make up any difference if investment returns begin to sag below the state’s assumed rate of return.

 Text by John Reitmeyer; graphics by Genesis Obando

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