With the close of Fiscal 2012 just a few weeks ago, the New Hampshire Retirement System has released preliminary investment return data. Though the final numbers still need to be crunched, in particular, the difficult to value real estate and private equity holdings, the initial investment return estimate is .7%

The assumed rate of return is 7.75%, leaving a shortfall of more than 7%.

George Lagos, the Executive Director of the New Hampshire Retirement System cited four reasons for the lackluster year: Market volatility due to slow GDP growth, the European Debt Crisis, sustained high unemployment rates and uncertainty over the US tax code.

While pension systems are designed to balance out good years and bad years over the long term, this lackluster year will negatively impact the funding ratio of an already underfunded system. Though assets may not have grown as projected, liabilities will have grown regardless, resulting in a larger unfunded liability.

The full extent of impact will not be known until firm figures are calculated for both the assets and liabilities of the system.