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N.J. public employee pension fund loses billions on investments in rocky first quarter

New Jersey’s public employee pension fund misplaced practically $3 billion within the first quarter of 2022 as mounting financial headwinds…

By Staff , in Investments , at April 28, 2022

New Jersey’s public employee pension fund misplaced practically $3 billion within the first quarter of 2022 as mounting financial headwinds and Russia’s invasion of Ukraine roiled international markets.

That amounted to a lack of practically 3% on investments and introduced the fund’s market worth all the way down to $94.7 billion as of March 31, in accordance with a Division of Funding report launched Wednesday.

It’s a substantial shift after large features over the previous two years helped to carry the fund to almost $100 billion by the tip of 2021. Geopolitical tensions and elevated volatility in each home and worldwide markets have made it tough to take care of these features.

A rising record of uncertainties, together with a surge in inflation, rising rates of interest and ongoing provide chain points, prompted the fund to extend the amount of money readily available, in accordance with Division of Funding Performing Director Shoaib Khan.

“Markets have been extraordinarily unstable, and there’s completely no scarcity of headwinds,” Khan instructed the State Funding Council throughout a digital assembly Wednesday.

New Jersey’s public employee pension fund, which helps the retirement of about 800,000 energetic and retired state and native authorities staff, has lengthy been among the many worst-funded within the nation.

Gov. Phil Murphy and state lawmakers are trying to fix the beleaguered pension system with the primary full cost to the fund in 25 years. And the governor’s newest finances proposal for the fiscal 12 months that begins July 1 contains one other full cost.

However funding losses may eat away at these features, and there was a current push within the state Legislature to reinstate cost-of-living raises for retirees that have been frozen in 2011 underneath former Gov. Chris Christie.

Whereas that transfer would definitely assist public employee retirees who is likely to be struggling to make ends meet amid rising inflation, it might additionally add billions of {dollars} a 12 months to the pension fund’s shortfall.

The fund’s investments are nonetheless displaying a optimistic return for the present fiscal 12 months that started final July 1, however Khan warned that losses may widen by the tip of June.

“Not like final 12 months at the moment, I believe we do have to be ready for a detrimental print on the finish of this fiscal 12 months,” Khan stated. “The fact is that clearly efficiency will not be as strong, removed from it the truth is.”

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Derek Corridor could also be reached at [email protected]. Comply with him on Twitter @dereknhall.

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