Returns on city pension plans outperform state plan


A comparison of the average market rates of return for the city’s four pension plans released this week by the city administration shows that they outperformed the state employee retirement system in the one-year period ending Dec. 31 as well as the average five-year rate. The plans also exceeded or were equal to the state’s 10-year rate.

According to an actuarial valuation of the state Employees’ Retirement system, as of Dec. 31, 2012, the state’s 12-month average was 12.49 percent. The city’s Police I and Fire plan for the same time frames had a rate of 12.7 percent; the rates for the Fire II, Police II and Municipal were 12.6, 12.7, and 12.9 percent, respectively.

For the most recent quarter, the state system’s five-year rate of return was 3.94 percent. The averages for the same time period for Police I and Fire was 5.7 percent. The other three plans averaged 5.8 percent.

The state’s 10-year average, an important benchmark when examining pension investment returns, was 8.30 percent, while the city’s Police I and Fire averaged 8.3 percent and Police II averaged 8.4 percent, Mayor Scott Avedisian said in a release. Fire II was at an 8.4 percent average and Municipal at 8.3 percent.

“The city takes its fiduciary responsibility to our employees very seriously,” Avedisian said. “These figures show that our plans are recovering from the economic downturn that began several years ago. I know that our Municipal Retirement Board members and those who oversee our police and fire pension systems will continue to work with our investment advisors, actuaries and finance team to ensure the continued health of these plans.”


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