The pension fund that invests the retirement money for more than 320,000 current and former New York City employees saw an 18.27% net rate of return for the fiscal year ending June 30, but has seen sharply reduced growth since then.

The New York City Employees’ Retirement System saw a return rate estimated at 2.43% between July 1 and October 19, according to a document obtained by The New York Sun. A spokeswoman for the city comptroller confirmed the 2.43% return, which drops down to 2.3% when expenses and fees to maintain the fund are factored in. The spokeswoman, Laura Rivera, noted, however, that the figure is an unaudited estimate.

The fund’s value on June 30 was estimated at $42.2 billion.

During fiscal year 2007 — July 1, 2006, through June 30, 2007 — NYCERS earned 18.39% before fees and 18.27% after fees. That was better, in absolute terms, than its 9.83% return rate for fiscal year 2006 before expenses.

The increase is consistent with overall stock market activity and is on track with returns from other public pension funds.

The California Public Employees’ Retirement System outperformed NYCERS, reporting a slightly higher return rate of 19.1% before fees and 18.8% after fees. The median return for public funds with assets over $1 billion for the fiscal year ended June 30 was 17.69%, according to the Wilshire Trust Universe Comparison Service.

Private endowments such as Yale University and Harvard University saw far larger gains — 28% and 23%, respectively.

In recent years, NYCERS has seen its expenses skyrocket, mostly because it is doling out more money to fund managers. The fund, which is managed by a board of trustees that includes representatives of the mayor, the public advocate, the city comptroller, and the city’s labor unions, had expenses of $69.4 million during fiscal year 2006, compared to $46.1 million the year before.

Those who follow the fund say they expect the trend to continue, particularly as the city comptroller, William Thompson Jr., looks to invest all five of the city’s pension funds in hedge funds.

An adjunct professor at New York University and Pace University, John Tepper Marlin, who also served as the chief economist in the city comptroller’s office until 2006, noted that the returns are politically important for Mr. Thompson as he gears up for a 2009 mayoral run. He said the 2007 figures are the first “main set of numbers” since Mr. Thompson’s began a push to get more professional pension fund managers on staff.

Mr. Thompson told The New York Sun last week that the five pension funds he oversees have done well compared to other municipal funds across the country. He said, “the real test is how we do when the market is down.”

He also noted that in the last five years the funds have increased private equity and real estate holdings and that he will “continue to diversify so we’re not just stocks and bonds.”

With the city’s contribution to the fund on the rise, many are worried about how the fund is going to continue to meet its growing obligations.

Last year, The New York Times quoted the city chief actuary, Robert North, saying that because of the unusual formula the city pensions use to make calculations, the city may have a gap between its obligations and resources by as much as $49 billion, nearly the size of the entire city budget. The article said the pensions look fully funded in flush times and in lean times, but that the numbers may not reflect reality.

The city’s contribution has nearly doubled to $4.9 billion since fiscal year 2004, when the city kicked in $2.5 billion. The Bloomberg administration is projecting that by 2011 that number will go up to $6.5 billion.

Mr. Bloomberg has, in the past, blamed Albany for passing pension sweeteners that puts the city taxpayers on the hook for more money. Those sweeteners, including an annual cost-of-living increase, outstrip private sector pensions, which have downsized benefits in recent years.

“It’s no secret that the state Legislature has been giving away our store, getting no productivity in return and saddling our children with costly pension giveaways,” Mr. Bloomberg said during his State of the City speech earlier this year.

“It’s time for Albany to stop playing Santa Claus with the city’s money,” he said.

The pension fund is required under state law to make payments to its members. If the fund does not produce enough money city taxpayers have to make up the difference.