On the heels of a flat year, New York’s Common Retirement Fund earned 2 percent during the first quarter of fiscal 2017, state Comptroller Thomas DiNapoli reported today.

The $181 billion fund—which bankrolls the pensions of municipal and county employees outside New York City—calculates taxpayer contributions based on the assumption that it will earn 7 percent a year. As it happened, DiNapoli’s reported 2 percent gain during the three months ending June 30 basically tracked the S&P 500, which was up 1.9 percent in the same period. In fiscal 2016, the fund earned a microscopic 0.19 percent.

So, based on that first quarter, and in light of the S&P’s further 4.3 percent gain since June 30, is New York’s largest public pension fund comfortably on track to hit its 7 percent target for fiscal 2017?

Not necessarily. With fully two-thirds of its money invested in domestic and foreign stocks, private equity and “absolute return strategies” (i.e., hedge funds), the New York State pension fund has a risky asset allocation profile typical of its counterparts across the country—because chasing risk is its only hope of earning 7 percent a year in a market where the most secure long-term bonds yield barely 2 percent. Although market indexes recent hit all-time highs, the Wall Street outlook remains decidedly mixed.

As usual, the comptroller’s announcement of quarterly results accentuated the positive—at least as he sees it:

“We’ve been able to make some slight gains despite markets that remain challenging,” DiNapoli said. “Fortunately, we’re long-term investors and remain well-funded as we navigate ongoing market fluctuations.”

“Challenging” is a fund manager’s euphemism for roiled, volatile and uncertain.

The second part of that quote—”we’re long-term investors and remain well-funded as we navigate ongoing market fluctuations”—is familiar boilerplate. It reflects what a recent Rockefeller Institute report called “potentially destructive myths and misunderstanding” embraced by all too many public fund managers across the country.  As recounted in my recent op-ed:

Among those myths is the notion — oft-repeated by DiNapoli — that public-pension funds are “long-term investors” that can stick with their assumptions through thick and thin, riding out the kind of market volatility that saw the state funds’ return on assets veer from a 26 percent loss in 2009 to a 26 percent gain in 2010.

In fact, if they really want to minimize costs for taxpayers in the long run, the state comptroller and other pension-fund managers need to be less tolerant of risk and more leery of volatility in financial markets than individual investors — who, after all, are routinely confronted with a federally required disclaimer to the effect that “past results are no guarantee of future performance.”

New York should lead all states toward more thorough and truthful public-pension accounting — linked to a more prudent funding method, as recommended by, among others, the Blue Ribbon Panel of the Society of Actuaries.

Could that result in even higher costs for taxpayers? Potentially, in the short run. But honestly confronting those costs now — and approving the fundamental reforms needed to rein them in — is the only sure way to prevent them from mushrooming in the future.