October 28, 2008 / 5:45 PM / 11 years ago

UPDATE 1-NY state pension fund down 20 pct since April

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NEW YORK, Oct 28 (Reuters) - New York state’s pension fund has tumbled 20 percent in value since April, a steep fall though not as big as the 30 percent decline suffered at the end of the dot-com era and after the Sept. 11, 2001 attacks on the United States, the state comptroller said on Tuesday.

The fund had just under $154 billion in assets on March 31, 2008, and Comptroller Thomas DiNapoli said investments were designed to withstand “market turbulence.”

The drop in the fund’s value is due to the stock market’s performance, a DiNapoli spokesman said, adding losses on some investments will not be realized until stakes are sold.

DiNapoli wants the state government to allow him to make more nontraditional investments, including in private equity, currently capped at 8 percent, real estate, which has a 6 percent limit, and hedge funds, which cannot top 5 percent.

The spokesman said DiNapoli regularly assesses whether there is any chance to recoup investment losses through the courts.

“If we believe we have lost assets unjustly or due to malfeasance ... we will take action to recover that,” the spokesman said.

The contribution rate for 2011 will not be determined by actuaries until August or September. DiNapoli is trying to prepare state and local governments for a likely hike after a drop in the contribution rate in 2010, said the spokesman.

The California Public Employees’ Retirement fund last week said it might need to tap state public employers for more money if it does not reverse recent steep losses in its portfolio.

Like many other states, New York and lots of municipalities are suffering from lower tax revenues due to the economic slowdown, meaning higher contribution rates could hit them hard. (Reporting by Joan Gralla; Additional reporting by Dan Wilchins; Editing by James Dalgleish)

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