Feb 19 New York state's $150 billion public
pension fund, the third largest in the United States, has mostly
bounced back from a corruption scandal that ousted its former
trustee, according to an outside review.
The fund is well-run, transparent and ethically sound,
according to Funston Advisory Services. The firm's report was
dated Feb. 4 but released on Tuesday.
"This review is a clear validation that we're on the right
path," New York State Comptroller Thomas DiNapoli said in a
telephone call. As comptroller, DiNapoli is the sole trustee and
manager of the New York State Common Retirement Fund, which has
more than 1 million members.
DiNapoli was tasked with taking over the comptroller's
office after his predecessor, Alan Hevesi, resigned in 2006 and
later pleaded guilty for his role in the pension "pay to play"
Hevesi admitted accepting nearly $1 million in benefits from
a Los Angeles-based money manager who got $250 million in
pension fund money to invest. Hevesi went to prison in April
2011 and was paroled this past December.
After the scandal, DiNapoli banned placement agents and took
other measures to clean up the fund, including a new ethics
program, new standards for conflicts of interest and monthly
public disclosure of investment transactions.
Still, the fund lacks staffers in several areas, the review
found. It needs more investment staff for certain asset classes,
and the risk and compliance functions are also understaffed, the
DiNapoli said the fund has been running a lean operation as
the economy recovers.
The fund also lost some employees due to turnover after the
corruption scandal, but it is planning on boosting staff levels
now that new Chief Investment Officer Vicki Fuller is in place,
DiNapoli told Reuters.
The two largest U.S. public pension systems are the $254
billion California Public Employees' Retirement System and the
$154 billion California State Teachers' Retirement System.