New York state's pension fund earned 14.6 percent, rising to $146.5 billion in the 2011 fiscal year that ended on March 31, the state comptroller said on Thursday.
The state pension fund, one of the nation's biggest, is also exceptional because it is around 100 percent fully funded. In contrast, many states, counties, cities and towns around the country confront enormous shortfalls in their pension funds.
However, the New York state fund has yet to fully recover losses suffered in the 2008-2009 recession, Comptroller Thomas DiNapoli said.
The record high of $156.6 billion was set in 2007; in 2009, the fund fell to just under $111 billion, a spokesman for the comptroller said by email.
Public pension managers are under the gun to improve returns because so many layers of local governments promised their workers pensions that they now find hard to afford.
The difficulty of affording public pension benefits has helped spark clashes between unions and politicians, as seen in Wisconsin, which limited unions' rights to bargain contracts.
As with any investments, returns vary with the periods measured. For example, the $233.6 billion California Public Employees' Retirement System, the biggest U.S. public pension fund, had a net return of 12.9 percent for the 12 months to March 31. California starts its fiscal year on July 1, and for its fiscal year-to-date, the fund returned a much fatter 18.6 percent.
In contrast to the New York City's $119 billion pension funds, which a deputy mayor criticized on Thursday for overly focusing on domestic equities, the state's pension fund also relies on international equities.
New York City's pensions are run by boards whose members are appointed by the mayor, the comptroller and the unions.
DiNapoli, an exceptionally powerful investor because he is the state fund's only trustee, said domestic equities rose 17.6 percent while international equities produced 14.3 percent.
Real estate investments yielded a 26.7 percent return, beating private equity investments, which returned 18.9 percent. Emerging markets equities produced 16.1 percent, while Treasury Inflation-Protected Securities yielded 9.7 percent and core fixed-income investments returned 8 percent.
(Reporting by Joan Gralla; Editing by James Dalgleish)