Deferred Compensation Board
Administration and Oversight of the New York State Deferred Compensation Plan
Public employees in New York may participate in a deferred compensation plan and thereby defer part of their pre-tax wages until after retirement. At the time of our audit, this plan had $1.5 billion in assets and about 84,000 participants. We examined the procedures used by the Deferred Compensation Board to administer this plan. We found that several improvements had been made in the operations of the plan. For example, the number of investment options had been increased and the account information provided to plan participants had been enhanced.
However, additional improvements were still needed. We noted that the Board was not as representative of plan participants as deferred compensation boards in other states. We also noted that deferred compensation plans in some other states reported lower administrative costs than New York's plan. We further noted that some of the investments in New York's plan were not in full compliance with Board guidelines, the riskiness of a certain investment option could be better disclosed, Board decisions could be better communicated to plan participants, and the contracts for managing certain investment options had not been approved by the State Comptroller as required.