Assemblyman Michael A. Montesano (R,I,C-Glen Head) re-introduced a 2011 measure this week calling for the establishment of an employee retirement system board of trustees to operate state and local pension systems, removing this function from the sole control of the comptroller’s office. The recent news that Governor Cuomo is planning to investigate Comptroller DiNapoli’s office for raising the fees paid to Wall Street firms managing the pension fund by 163 percent for a total of $425 million has made this legislation more necessary than ever.
“If the recent story about Comptroller DiNapoli doling out $425 million in fees to Wall Street firms while the value of the pension fund plummeted during the stock market’s decline demonstrates anything, it’s that our pension system is too important and too immense in scale to be entrusted to the oversight of a single person,” said Montesano. “By having a sitting board of trustees managing pensions, we can better manage the funds while encouraging more transparency from the investment groups doing business with the common retirement fund, a state of affairs desperately lacking under the current setup.”
Under Assemblyman Montesano’s proposal, an Employee Retirement System Board headed by the comptroller would serve as the trustees of the Common Retirement Fund (CRF). The members on the board would be nominated by a designating commission and both current and future rules and regulations governing the retirement system would fall under its purview. Also included in this legislation are standards of integrity for investment firms conducting business on behalf of the CRF.
“Pension reform is about more than just Tier VI,” said Montesano. “It’s also about ensuring funds invested on behalf of the Common Retirement Fund are done so responsibly with the necessary oversight to prevent the type of mismanagement that can bankrupt the system.”