An important message from the Comptroller

I wanted to take this opportunity to assure each of you that despite the recent turmoil in the financial markets, your pension remains safe, secure and fully funded.

Over the last few years, both my office and the trustees of the New York City Pension Funds have taken a series of steps to broaden the placement of pension assets. This approach has two principal benefits: It serves to reduce the volatility of our investments and also takes advantage of the financial market’s historical upward investment trend.

Each of us remembers the U.S. dot-com investment bubble that arose earlier in this decade and caused similar turbulence in the financial markets. As I entered office in 2002, it became clear that we could no longer pursue antiquated strategies that relied exclusively on domestic equities and bonds. Accordingly, our retirement system has begun using active management strategies and alternative investment classes to create a stronger foundation for future growth. By diversifying our investment portfolio into different investment classes, we have ensured that going forward, the City’s retirement system is not tied exclusively to the fluctuations of the domestic markets.

This new approach has paid off.  From June 2003 to June 2008, the New York City Pension Funds grew from $83 billion to $105 billion. Of course, like most investors, the Funds have suffered losses in recent months, dropping in value to roughly $96 billion during the third quarter. However, despite these short-term challenges, we are confident that our investment strategies will better insulate the Funds’ assets from severe downward pressures and allow us to take advantage of the upward trend that will certainly follow the market’s recent downdraft.

Be assured that we will continue to closely monitor the financial markets and work to protect your hard-earned benefits.

William C. Thompson, Jr.
New York City Comptroller