And amid sustained criticism from unions and some legislators over increased spending on alternative investments – like hedge funds and private equity funds – the state’s investment returns were driven largely by those non-traditional accounts, officials said.
But the returns into the public employee pension fund aren’t enough to keep up with the flow of cash out every year to pay retirees, underscoring the need for greater contributions from the state, those officials said. Governor Christie has cut the state’s contributions the last three budgets amid declining revenues to the state, but his reduced payments compounded years of partial contributions to the fund by prior administrations, creating an unfunded liability today of between $40 billion and $80 billion, depending on the accounting source.
