New Jersey pension funds return 1.7% on investments

New Jersey’s pension funds, with $67.2 billion of assets, returned 1.7% last year as gains from debt, private equity and real estate investments tempered losses from global stocks.

International equities lost 18.3%, while investments in U.S. fixed-income gained 15.1%, according to a report to the New Jersey State Investment Council, Trenton. Real estate returned 13.7% and private equity returned 13.3%, according to data from the state Division of Investment, which oversees the state’s seven public pension funds.

Last year’s return was short of the system’s 8.25% assumed rate of return.

The funds returned 18% in the 12 months ended June 30, and have an annualized 10-year return of 5.1%.

To address the underfunding, Gov. Chris Christie signed bills in June that raised pension and health-care contributions for employees, increased the minimum retirement age for new employees to 65 from 62 and froze cost-of-living increases.

The state’s estimated pension funding deficit fell to $36.3 billion from $53.9 billion after passage of Mr. Christie’s plan, but the gap then swelled by $5.5 billion to $41.8 billion for the 12 months through June after Mr. Christie skipped the state’s pension payment.

Mr. Christie this year has budgeted $484 million for a pension payment; actuaries had recommended the state put in $3 billion.

The value of the pension assets had been $69.6 billion as of Oct. 31. It’s down 3.4% in the fiscal year that began July 1, through Dec. 31, according to the investment reports.