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The New York State Common Retirement Fund

Comptroller DiNapoli’s Reforms to the State Pension Fund

Immediately upon taking office, State Comptroller Thomas P. DiNapoli began reforming the New York State Common Retirement Fund (Fund) to make it one of the most transparent and accountable public pension funds in the country. Like all New Yorkers, DiNapoli is outraged by the alleged wrongdoing of the former administration and has taken steps to strengthen oversight of the Fund and fix New York’s weak campaign finance laws.

Changed the Way the Fund Does Business:

  • Banned pay-to-play practices by issuing an executive order that prohibits the Fund from doing business with any investment adviser who has made a political contribution to the State Comptroller or a candidate for State Comptroller. The ban, which closely parallels proposed Securities and Exchange Commission (SEC) regulations, will last for two years from the date of the contribution.
  • Banned the involvement of placement agents, paid intermediaries and registered lobbyists in investments with the Fund. The ban includes entities compensated on a flat fee, a contingent fee or any other basis;
  • Created a Pension Fund Task Force to review the practices and policies of the Fund chaired by Shannon O’Brien, the former Massachusetts Treasurer;
  • Expanded internal and external vetting, review and approval of all investment decisions;
  • Formed a special commission, headed by former NYC-Mayor Ed Koch and Wall Street guru Frank Zarb, to review operations of the Office of the State Comptroller (OSC);
  • Created a mandatory ethics training program for all staff, including the Comptroller;
  • Drafting legislation to codify the pension fund reforms to eliminate the potential for abuse in the future.

Strengthened Oversight of the Fund:

  • Partnered with the State Insurance Department to develop new regulations governing the operations of the Fund;
  • Hired an outside law firm and an independent investment consulting firm to review Fund investments with firms under investigation by the New York Attorney General and the SEC;
  • Created Inspector General position as recommended by the Koch-Zarb Commission, to monitor and review investment transactions and the activities of the Comptroller and all OSC employees;
  • Hired Special Counsel for Ethics to monitor and review investment transactions and to develop and implement a comprehensive ethics program.

Increased Transparency in Fund Transactions:

  • Releases monthly reporting on investment transactions completed by the Fund since February 2007, including placement agent and intermediary information where applicable;
  • Publicly announces pension fund performance quarterly instead of annually;
  • Initiated a comprehensive review of all Fund external consultants and the development of a more comprehensive pool of external consultants.

Proposed Campaign Finance Reform.

  • Comptroller DiNapoli also proposed Campaign Finance Reform legislation for the public funding of Comptroller campaign in 2010 to eliminate the opportunity for candidates to be influenced by wealthy donors and other interests.