Politics
New Jersey Pension Fund Posts 15% Return in 2026, Faces Public Calls to Divest Israeli Bonds and Palantir
During a New Jersey State Investment Council public meeting, officials reported that the state pension fund earned nearly 15% in investment returns for the 2026 fiscal year, which ended June 30. The return exceeded the fund’s 7% assumed rate of return and helped the fund maintain full funding of its annual employer obligation, now over $7 billion, including contributions from the New Jersey Lottery. Investment council chair Deepak Raj praised the results, noting they were achieved in an exceptionally volatile environment.
However, preliminary estimates for the first quarter of the current fiscal year, which began July 1, show returns of less than 1% through September. State officials attribute the lower performance to early‑year market conditions and the potential uncertainty surrounding upcoming midterm elections.
The council also heard public testimony urging the pension fund to divest from Israeli bonds and the technology firm Palantir, citing human‑rights concerns. A Seton Hall University law professor, Abdul Rehman Khan, argued that the state is not mandated to invest in Israel and that localities should step up when international bodies fail.
The pension fund, which covers more than 800,000 New Jersey public workers—including teachers and judges—has assets managed by the Division of Investment and external professionals. The investment council sets policy but does not manage day‑to‑day operations.
The 2026 fiscal year marked the fourth consecutive year of net returns above the fund’s assumed rate, with a 7.82% excess. Net returns were nearly 11% in 2025 and 2024, and 9% in 2023. All asset classes posted positive returns, with emerging markets (+39.53%), U.S. equity (+23.20%), and international developed market equity (+21.61%) leading.
State treasurer Aaron Binder highlighted the strong results and the administration’s commitment to full employer contributions as a significant step toward stabilizing the fund. Despite no retiree facing a missed pension check, actuaries estimate that decades will be needed to fully recover from past underfunding.
New Jersey’s pension funding practices earned a credit‑rating upgrade to AA‑ from KBRA, citing improved budget management and a track record of full actuarial pension funding. Governor Mikie Sherrill praised the upgrade as positive news for the state.