NY Pension Fund Review: Report Issued

Feb 19, 2013

An outside review of New York's $150 billion pension fund for public workers shows it fixed ethical problems that led to a "pay-for-play" scandal.  

The three-year review by Michigan-based Funston Advisory Services says the Common Retirement Fund's 2009 decision to ban paid placement agents used by other pension funds does not appear to have kept it from accessing qualified outside investment managers.

Funston says state Comptroller Tom DiNapoli, the fund's sole trustee since the 2007 scandal, is meeting all applicable ethical and conflict-of-interest standards and is acting solely for the benefit of its 1 million workers and beneficiaries.

DiNapoli explained he followed recommendations issued by the Pension Task Force, including tightened oversight of the fund and implementation of major reforms.

Funston conducted its analysis from early September 2012 through January 2013. The review notes the fund is thinly staffed for its size and complexity, depending more on external consultants, and needs better computer infrastructure.

The Comptroller is satisfied the report identified avenues of positive change. More than one million New Yorkers depend on the Common Retirement Fund for their financial security.

DiNapoli's predecessor Alan Hevesi was paroled in December after 20 months in prison for a felony conviction of official misconduct. An attorney general's investigation showed that pension fund officials and cronies, including Hevesi political adviser Henry "Hank" Morris, got fees and favors from financiers seeking chunks of the fund to manage.