ALBANY — The state's large pension fund, which serves around 1.7 million civil servants and retirees, is expected to survive the prospect of stock market disruption and additional declines, according to state and national authorities.
However, taxpayers could be hit in 12 months, how much is based on the magnitude of the loss? Taxpayers by law are on the hook to compensate for losses in stock investments.
The stock market has lost around 20% so far this year. The loss comes after President Donald Trump threatened tariffs of up to 125% on foreign imports.
Public Workers' pension plans typically invest around 40% of their assets in stocks. The remaining investments can be found in fixed assets, infrastructure, bonds, real estate, cash and other ventures.
“We're clearly down, everyone's down,” state director Thomas DiNapolis said he manages a $273.4 billion state pension fund for most state workers, retirees, police and expert firefighters. “But we're funding this well, so we have enough money to pay for pension benefits… they shouldn't be worried.”
However, he said new workers who work for 25 years before resignation may be worried about long-term financial damages and how this will affect pension benefits by the time they retire.
The separate teacher retirement system in New York serves 455,000 members. The fund's board will not address losses or new strategies until meeting later this month, spokeswoman Heidi Brennan said. She said the investment was “continuously reviewed and adjusted” to “fulfil the retirement benefits.”
Dinapoli and Brennan said they have not yet calculated their losses. Dinapoli said it was because the market remains very unstable.
Teacher Retirement Funds rely on the contributions of school districts and employers from workers and investments. Teacher contributions are based on salary and years of service, but employer contributions may increase as needed to support the fund. And these costs can be passed on to the property taxpayer.
However, the national impact is becoming more clear.
“Between April 3rd and 9th this year, the 25 largest U.S. public pensions have lost nearly $200 billion, and nearly $250 billion since the beginning of this year,” said Olivia S. Mitchell, professor at the University of Pennsylvania's Wharton School and executive director of the Pension Research Council.
Back in New York, public workers and pensioners may feel safe, but taxpayers (many of whom have suffered deep losses in private sector retirement funds, but they have to wait to see how much hit they get as they are below investment. Dinapoli has once again had to cherish the fund and decide whether the state and local governments would pay more to the pension scheme.
“Dinapoli sounds like a relief to the wrong people,” said Bill Hammond of the Imperial Public Policy Centre, a financially conservative think tank. “The state constitution guarantees the promised benefits of current workers and retirees regardless of what happens to the pension fund. The cause of concern is state and local taxpayers, which should effectively compensate for the lack of fund investments when they fall below performance.
History shows that it takes time to recover from damage.
For example, the Dow Jones Index and state pension records show that, following the terrorist attacks that significantly reduced the value of the stock market and the value of the state employee pension fund on September 11, 2001, markets began to recover by the end of 2003, and pension funds began to recover by the end of 2004. The Covid-19 pandemic, which began in 2020, began rebounding in 2024, records show.
However, Dinapoli said these economic disasters are different from today's crisis, complicating the recovery.
“The difference is that the Great Recession was part of the economic collapse,” Dinapoli said. “Covid was a public health emergency. What's different this time is the self-harm scars caused by the current administration's tariff policy and how it maintains the overall economic order.”
Hank Kim, executive director of the National Conference on Civil Service Retirement Systems, said massive pension plans like New York have long-term investments and there is no need to respond to “the daily whims of the market.”
Workers and retirees in state and local pension plans should “have confidence… they can depend on their interests, whether the market is rising or falling,” Kim told Newsday in an interview.
However, some public pension funds facing major losses across the country are taking action.
For example, large California funds are using stocks that have fallen in price to strengthen their portfolios. Others, such as New York, “we're waiting to see if the market volatility is temporary, so we're not going to do anything right away,” Wharton School's Mitchell told Newsday in an emailed response.
However, experts said the key unknown factor is how long the stock market will continue its downward spiral, potentially enforcing higher employer contributions by government employers as tax revenues shrink.
“If the US economy is heading towards a recession, and if it appears more likely, according to forecasters, public planning will be further challenged by a decline in tax revenue,” Mitchell said.
ALBANY — The state's large pension fund, which serves around 1.7 million civil servants and retirees, is expected to survive the prospect of stock market disruption and additional declines, according to state and national authorities.
However, taxpayers could be hit in 12 months, how much is based on the magnitude of the loss? Taxpayers by law are on the hook to compensate for losses in stock investments.
The stock market has lost around 20% so far this year. The loss comes after President Donald Trump threatened tariffs of up to 125% on foreign imports.
Public Workers' pension plans typically invest around 40% of their assets in stocks. The remaining investments can be found in fixed assets, infrastructure, bonds, real estate, cash and other ventures.
What Newsday found
- Large state pension funds Services to nearly 1.7 million civil servants and retirees are expected to survive the stock market turmoil, despite heavy investments in stocks, state and national authorities say.
- However, taxpayers could be a hit in 12 months. Taxpayers by law are on the hook to compensate for losses in stock investments.
- Public Workers' pension schemes are usually invested Approximately 40% of the stock's assets. The remaining investments can be found in fixed assets, infrastructure, bonds, real estate, cash and other ventures.
“We're clearly down, everyone's down,” state director Thomas DiNapolis said he manages a $273.4 billion state pension fund for most state workers, retirees, police and expert firefighters. “But we're funding this well, so we have enough money to pay for pension benefits… they shouldn't be worried.”
However, he said new workers who work for 25 years before resignation may be worried about long-term financial damages and how this will affect pension benefits by the time they retire.
The separate teacher retirement system in New York serves 455,000 members. The fund's board will not address losses or new strategies until meeting later this month, spokeswoman Heidi Brennan said. She said the investment was “continuously reviewed and adjusted” to “fulfil the retirement benefits.”
Dinapoli and Brennan said they have not yet calculated their losses. Dinapoli said it was because the market remains very unstable.
Teacher Retirement Funds rely on the contributions of school districts and employers from workers and investments. Teacher contributions are based on salary and years of service, but employer contributions may increase as needed to support the fund. And these costs can be passed on to the property taxpayer.
However, the national impact is becoming more clear.
“Between April 3rd and 9th this year, the 25 largest U.S. public pensions have lost nearly $200 billion, and nearly $250 billion since the beginning of this year,” said Olivia S. Mitchell, professor at the University of Pennsylvania's Wharton School and executive director of the Pension Research Council.
Back in New York, public workers and pensioners may feel safe, but taxpayers (many of whom have suffered deep losses in private sector retirement funds, but they have to wait to see how much hit they get as they are below investment. Dinapoli has once again had to cherish the fund and decide whether the state and local governments would pay more to the pension scheme.
“Dinapoli sounds like a relief to the wrong people,” said Bill Hammond of the Imperial Public Policy Centre, a financially conservative think tank. “The state constitution guarantees the promised benefits of current workers and retirees regardless of what happens to the pension fund. The cause of concern is state and local taxpayers, which should effectively compensate for the lack of fund investments when they fall below performance.
History shows that it takes time to recover from damage.
For example, the Dow Jones Index and state pension records show that, following the terrorist attacks that significantly reduced the value of the stock market and the value of the state employee pension fund on September 11, 2001, markets began to recover by the end of 2003, and pension funds began to recover by the end of 2004. The Covid-19 pandemic, which began in 2020, began rebounding in 2024, records show.
However, Dinapoli said these economic disasters are different from today's crisis, complicating the recovery.
“The difference is that the Great Recession was part of the economic collapse,” Dinapoli said. “Covid was a public health emergency. What's different this time is the self-harm scars caused by the current administration's tariff policy and how it maintains the overall economic order.”
Hank Kim, executive director of the National Conference on Civil Service Retirement Systems, said massive pension plans like New York have long-term investments and there is no need to respond to “the daily whims of the market.”
Workers and retirees in state and local pension plans should “have confidence… they can depend on their interests, whether the market is rising or falling,” Kim told Newsday in an interview.
However, some public pension funds facing major losses across the country are taking action.
For example, large California funds are using stocks that have fallen in price to strengthen their portfolios. Others, such as New York, “we're waiting to see if the market volatility is temporary, so we're not going to do anything right away,” Wharton School's Mitchell told Newsday in an emailed response.
However, experts said the key unknown factor is how long the stock market will continue its downward spiral, potentially enforcing higher employer contributions by government employers as tax revenues shrink.
“If the US economy is heading towards a recession, and if it appears more likely, according to forecasters, public planning will be further challenged by a decline in tax revenue,” Mitchell said.
