Nov. 16 (Bloomberg) -- New York state’s pension, the third- largest in the U.S., posted a 18.3 percent return for the six months through Sept. 30 as domestic and international stocks boosted the fund’s performance, Comptroller Thomas DiNapoli said.

The fund, which covers 1 million current and retired workers, had assets valued at $126 billion, compared with $109.9 billion at the beginning of the fiscal year, on April 1, the comptroller said. The Standard & Poor’s 500 Index returned 30 percent during the same period.

“Our commitment to long-term, value investing will continue to protect taxpayers,” DiNapoli said in a news release.

New York’s pension declined 26.4 percent last fiscal year, prompting DiNapoli to propose that state and local government increase contributions to about 11 percent of payroll by 2011.

“The solid six months does not compensate for the damage done last year,” DiNapoli said in a teleconference.

U.S. stocks made up 37.2 percent of the pension fund’s total assets as of Dec. 31, while international equities comprised 16.4 percent, the comptroller said. About 30 percent of the fund is invested in cash and bonds and 8.9 percent in private equity.

The pension is concluding an asset allocation analysis, DiNapoli said. “I don’t anticipate any dramatic shifts.”

To contact the reporter on this story: Martin Z. Braun in New York at mbraun6@bloomberg.net,

Last Updated: November 16, 2009 13:45 EST