City pension funds had almost $2 million invested with First Republic and Signature banks — losing it all when both banks failed this year.
The losses were contained in new data The Post obtained from the city Comptroller’s office under a Freedom of Information Law request.
Though a federal bailout rescued bank depositors, the city’s pension cash had been invested in bank stocks and bonds.
“The overall loss is negligible in the context of the daily market motions of our $240 billion pension funds,” said Chloe Chik, spokesperson for Comptroller Brad Lander.
All five city pensions funds were hit in the bank failures.
Pension spending increased in all of the 10 largest American cities over the last decade, with a few cities experiencing a doubling or even tripling of their expenditures in 2021 dollars.
Almost all cities saw an increase in pension spending per employee.
There is large variation in the amount per employee that American cities are spending on pensions.
To respond to rising pension demands, some cities have reduced employment, often in the area of public safety.
A worsening market environment for pension funds will necessitate increased pension expenditures by cities in 2023 and beyond, exacerbating pressures to limit or reduce employment and, thus, city services.
But as with everything else in New York in the past three years, things went awry. Last year’s 88 track deaths were 35% above the 2018 and 2019 averages — 65 each year.
For context, 120 pedestrians died above ground last year in crashes with cars or trucks, close to the average of 121 in 2018 and 2019.
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What’s going on? Of 1,365 known subway-track incidents in 2022 (most of which didn’t end in death), about 15% were accidental falls or medical emergencies, a new MTA analysis finds.
A thankfully surprisingly low number — fewer than 10% — was suicides or suicide attempts.
An even smaller percentage was assaults — that is, people being pushed to the tracks. (Though with pushes to the tracks comprising three of last year’s 10 subway murders, a 30-year high, a small percentage is too many.)
In most cases — well more than two-thirds — people ended up on the tracks voluntarily.
In 20% of total cases, people were clearly mentally ill (but not attempting suicide); in another 10% or so, people were drugged or drunk.
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The worst spike in track intrusions started a little more than a year ago, in December 2021 to February 2022. (This includes January 2022, when Michelle Go was pushed to her death in Times Square by a mentally ill, violent ex-con.)
Since the Covid pandemic hit New York City in March 2020, traffic deaths have skyrocketed, just as they have across the country. Locally and nationally, these deaths have paralleled the same double-digit trajectory upward as homicides and drug-overdose deaths. In 2019, 220 New Yorkers died on city streets, near the record low of 206, set the year before. In 2021, 273 people died, a nearly one-quarter increase in two years. In 2022, as of late May, 93 people have died, down slightly from last year, but 12 percent above pre-Covid levels.
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s in many areas of public safety and public health, New York City started the pandemic with an advantage. In 2019, the city’s 220 traffic deaths—whether people in cars, or pedestrians, or cyclists—represented a per-capita rate of about 2.6 per 100,000 residents, just a small fraction of the 11.1 per 100,000 killed nationwide. Among large, urbanized areas, New York stood out for safety, as well. In Miami-Dade County in 2019, for example, the rate was 11 per 100,000; metro Atlanta’s rate was similar. Even among denser northeastern and mid-Atlantic cities, which have long had lower traffic-death rates than the sprawling south and west, New York performed slightly better than Boston, with its 2.8 traffic deaths per 100,000, and much better than Philadelphia, with its 5.7 deaths per 100,000.
Pre-pandemic, New York’s falling traffic deaths made it a national outlier. Between 2011, when traffic deaths hit a modern low nationwide, and 2019, such fatalities across the country rose by 11.9 percent, to 36,355 annually. In Gotham over this period, by contrast, they fell 12 percent. The difference in pedestrian casualties was especially striking. Nationwide, pedestrian deaths began rising in 2010, after having fallen, reasonably steadily, for at least three decades. By 2019, annual pedestrian deaths had risen from their 2009 low by more than half. But in New York, pedestrian deaths fell by 21.5 percent over the same near-decade.
The New York State Common Retirement Fund has reported a 9.51% investment return for fiscal year 2022, while the New York City Retirement System reported an annual preliminary loss of 8.65% among its five pension funds.
However, the fiscal year for the state’s pension ended March 31, while the city’s pension funds ended their fiscal year June 30, after a quarter during which global markets tumbled and the S&P 500 fell by more than 16%.
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The portfolio’s alternative investments buoyed the pension fund’s returns, which raised the portfolio’s asset value to $272.1 billion as of March 31. Private equity returned 37.57% for the year, while the fund’s real estate investments and real assets returned 27.4% and 16.12% respectively. The three asset classes account for nearly 24% of the portfolio’s total asset allocation. The pension fund recently reported that it had committed more than $3 billion in alternative investments during June alone.
The NYCRF had an asset allocation of 49.70% in publicly traded equities, 21.18% in cash, bonds and mortgages, 13.64% in private equity, 10.00% in real estate and real assets and 5.48% in credit, absolute return strategies and opportunistic alternatives. The fund’s long-term expected rate of return is 5.9%.
New York City’s pension funds lost 8.65% of their value for the fiscal year that ended June 30, according to a release Friday from city Comptroller Brad Lander.
While more detailed information won’t be released until September, the losses reduced the pension funds to about $240 billion.
While the S&P 500 stock index fell 14% in the first six months of 2022, Lander said that all is well with the pension funds “Despite market declines on a scale that hasn’t been seen in decades, the New York City retirement system outperformed our benchmarks and are well positioned to weather market volatility in the long run,” he said in a statement.
But the city budget — currently $101 billion — will still take a hit.
New York City Comptroller Brad Lander and trustees of the New York City Retirement Systems announced that investments in climate solutions have now reached more than $7 billion across all systems and asset classes as of the end of 2021, well exceeding the $4 billion goal set by three of the funds in 2018. These investments in companies that are helping to facilitate a just transition to a low carbon economy build on the $4 billion divestment by three of the five funds from companies that own fossil fuel reserves, which is expected to be completed later this year.
This milestone surpasses the goals set by the New York City Employees’ Retirement System (NYCERS), Teachers’ Retirement System (TRS), and Board of Education Retirement System (BERS), in 2018 to double their investments in climate solutions from $2 billion to $4 billion by 2022. In October 2021, the three Systems adopted a goal to achieve net zero greenhouse gas emissions by 2040. As part of this commitment, the three Systems set a goal to reach a total of $37 billion in climate solutions investments by 2035, in line with a total of $50 billion across all five Systems by 2035.
The climate solutions in the New York City Retirement Systems’ portfolio includes investments in companies that derive a majority of their revenue from climate mitigation, adaptation, and resilience activities, such as renewable energy, energy efficiency, pollution prevention, and low-carbon buildings. Climate solutions investments in the Systems’ portfolios have grown consistently and greatly in the last several years, more than doubling in value since 2018.
New York City’s comptroller is the latest public official trying to change laws aimed at limiting risk in pension investments, as U.S. state and local pension funds try to plug shortfalls in a low-return environment.
Comptroller Brad Lander, who oversees about $260 billion in retirement money for city police, firefighters, teachers and other public workers, is asking New York lawmakers for more flexibility to invest in private markets, high-yield debt and foreign stocks. The state comptroller’s office, which supervises another $280 billion in retirement assets, views the idea favorably, with a representative saying such flexibility “is key in times of market volatility.”
Pension funds, like household investors, are facing a relatively bleak environment for stocks and bonds, the bread and butter of a traditional retirement portfolio. In the face of historic inflation and Federal Reserve efforts to contain it, these funds are finding they can no longer rely on bonds to rise when equities fall and vice versa. In the first quarter, the S&P 500 returned minus 4.6% while the Bloomberg U.S. Aggregate bond index returned minus 5.93%.
“Those two things taken together is what’s scary: the prospect of both going down at the same time,” said Steve Foresti, chief investment officer at Wilshire Associates, which advises large public pension funds. Retirement portfolio managers, he said, are asking “in that environment, do I have anything that actually goes up?”
Pension funds around the U.S. are upping their allocations to private equity after a year of record-breaking returns. According to data obtained from Preqin, the average public pension’s allotment to private equity increased to 8.9% in 2021. In contrast, the average allocation was just 6.5% in 2012.
New York City’s pensions are among those that may see an increased allocation to the asset class in their portfolios should a new law pass. Currently, New York State implements a “basket clause,” which prevents public pensions from investing above 25% of their total portfolios in investments considered higher risk, including real estate, infrastructure, hedge funds, international equities, and private equity. The proposed law would increase that allocation to 35% for all pension funds in the state. If the law passed, the boards of New York City’s five public pensions would vote on whether to increase the “basket” for their own pension funds.
New York City Interim CIO Michael Haddad, who is responsible for overseeing investments in the five pension plans across the city, says that while the change in the law isn’t targeted at private equity exclusively, it’s likely that the asset class would increase.
New York employees and taxpayers are unwittingly financing Russian companies and the oligarch pals of Vladimir Putin with at least $519 million invested in assets now frozen by the war-mongering dictator, The Post has learned.
City and state pension systems have pledged to sell off the holdings in protest of Russia’s assault on Ukraine, but Moscow has prohibited foreign investors from dumping the stocks.
“Putin is a thug and he’s holding our money hostage,” said Gregory Floyd, a Teamsters union leader and trustee of the New York City Employee Retirement System, NYCERS.
New York City’s five pension systems – covering teachers, cops, firefighters and other city employees – have invested a total $284.5 million in 33 publicly traded Russian stocks, according to records released to The Post by city Comptroller Brad Lander’s office.
On Feb. 25, the market value of the Russian assets was $185.9 million, nearly $100 million less than the purchase price, the latest available records show.
The recent op-ed in Crain’s New York Business by former City Comptrollers Jay Goldin and Elizabeth Holtzman (“Affordable housing initiative worked in the past and can work again today”) recalled a city pension fund program, initiated in 1983, that was specifically designed to finance the renovation of deteriorated rental apartment buildings in lower income neighborhoods. Supported by New York State mortgage insurance, the pension investments financed the restoration of a wide range of apartment buildings and worked uniquely well for small buildings with owners of limited resources. Two percent of the pension funds’ assets were committed for long-term, fixed-rate mortgages, with an interest rate priced at the market, with a two-year rate lock while the capital improvements were made.
Recognizing that these buildings would need some public subsidy—and that many owners lacked the experience to deal with complex government processing—a system evolved whereby these investments were coupled with streamlined city subsidy programs. The program’s goal: to restore a building’s physical and economic health while keeping its apartments affordable.
The pension funds filled a critical gap as most conventional long-term lenders viewed this market as too complicated and too unprofitable. For many years after its inception, the Community Preservation Corporation was the primary user of the program, using its “one-stop-shop” to originate construction loans for predominantly small properties. Upon construction completion, the long-term mortgage was provided by the pension funds. Over time, other banks were approved to originate loans for the funds, with their focus mainly on financing the renovation of larger buildings.
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Fourth, the pension funds should recommit to investing up to 2 percent of their assets (now $5 billion) for long-term financing at a market rate, insured by the State Mortgage Insurance Fund. In the long history of the program, the funds have experienced no losses, the state insurance fund covering the few losses that had occurred.
Efficient implementation can minimize the use of public funds and provide a large pool of fixed-rate, long-term financing for these properties. Doing so is within the purview of the city’s comptroller and the pension fund trustees.
The two zip codes encompassing this region — 11224 and 11235 — have experienced 75 deaths per 100,000 people over the last month, a fatality rate nearly three times the citywide average. The pair of zip codes ranked only behind East New York when it came to the pace of COVID deaths between December 24th and January 20th, while their hospitalization rates were also among the highest in the city.
These two zip codes in southern Brooklyn also have lower vaccination coverage than the city as a whole, a common thread between most of the places hit hardest this winter. The area is averaging 66% full vaccination, compared with 75% citywide. In adjacent Gravesend, fewer than two-thirds of residents are fully vaccinated, and meanwhile, some parts of the city are approaching universal coverage.
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Hospital leaders said undervaccination is having an outsized effect on these oceanside communities because the area’s demographics make residents prone to severe illness from COVID-19. In Brighton Beach and Coney Island, 26% of residents are over the age of 65, compared with about 14% in the borough as a whole. Many of those elderly residents also have underlying health conditions.
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Citywide, 89% of New Yorkers between ages 65 to 74 are fully vaccinated, but the rate drops to 63% for people older than 85. Municipal data also show coverage varies by region and by other demographics. For instance, just 62% of white seniors in the Bronx are fully vaccinated, and only 65% of Black seniors in Brooklyn.
