New York Pensions Paid More Fees To Wall Street In 2013-14, But Fee Growth Is Slowing

Manhattan

New York City released its annual financial report Friday, which gave observers a peek into a part of pension finances under growing scrutiny: investment fees paid by the city’s 5 major pension funds.

The fees paid by the city’s pension funds have grown since last year. But the rate at which they’re growing has slowed significantly.

From Bloomberg:

New York’s five pension funds paid Wall Street investment managers $530.2 million in the most recent fiscal year, an 8.5 percent increase, according to the city’s annual financial report released today.

The rate of growth in the year through June slowed compared with the previous period, when expenses paid to the city’s almost 250 managers rose 28 percent.

New York City Comptroller Scott Stringer, who serves as chief investment adviser to the pensions, has vowed to reduce fees and increase internal management. Fees erode returns crucial to funding benefits for New York’s more than 237,000 retirees and future payments to 344,000 employees.

Pension assets for police officers, firefighters, teachers, school administrators and civilian employees rose about 17 percent to $160.6 billion in the 12 months ended June 30, according to the report.

Eric Sumberg, a spokesman for Stringer, didn’t immediately respond to a request for comment.

The five pension funds included in the report are: the New York City Employees’ Retirement System (NYCERS), Teachers’ Retirement System of The City of New York (TRS), New York City Police Pension Fund, New York City Fire Pension Fund, and the New York City Board of Education Retirement System (BERS).

Collectively, the funds allocate 6 percent of assets to private equity, 2 percent to hedge funds, 29 percent to fixed income and 58 percent to equities.

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