The New York State Common Retirement Fund, Albany, reduced its assumed rate of return to 6.8% from 7%, Thomas DiNapoli, the state comptroller and sole trustee of the $216.2 billion fund, said Thursday.
The reduction took effect April 1, the start for the pension fund's current fiscal year, said Tania Lopez, a spokeswoman for Mr. DiNapoli.
"The long-term outlook for investors is changing and requires a more conservative approach," Mr. DiNapoli said in a news release. "As in years past, we're taking the responsible action of lowering our assumed rate of return now so we can better weather market volatility."
Mr. DiNapoli last reduced the assumed rate of return to 7% from 7.5% in 2015. Prior to that, in 2010, he cut it to 7.5% from 8%.
The pension fund reported a 5.23% rate of return for the fiscal year ended March 30.
The three-year annualized return rate was 9.32% and the five-year annualized return rate was 7%, according to the annual report to the comptroller on actuarial assumptions, which accompanied Thursday's news release. The 10-year annualized return was 10.34% and the 20-year annualized return was 6.64%.
The report noted that the median assumed rate of return among public pension funds is 7.25% as of February, based on data compiled by the National Association of State Retirement Administrators.
Sixteen public pension plans have assumed rates of return below 7%, and 28 plans have rates at 7%, the comptroller's report said, referencing NASRA data. Sixty-six have rates of 7.01% to 7.50% while 19 have rates of 7.51% or higher.
The report said the New York pension fund had a funded ratio of 96.1% based on a market value of assets and 95% based on an actuarial value of assets for the fiscal year ended March 31.