Robert Antonacci | Pension360

NY Comptroller DiNapoli: Six Reasons the State Shouldn’t Switch to a 401(k) System

State Comptroller Thomas DiNapoli is the sole trustee of New York’s $180 billion Common Retirement Fund (CRF).

His challenger, Robert Antonacci, has said he would shift New York’s pensioners into a 401(k)-type plan if elected.

But during an editorial board meeting Monday, DiNapoli laid out six reasons why he’d keep New York’s defined-benefit system in place. From Syracuse.com:

1. It benefits 1 million New York employees and their families, a significant portion of the state’s population, he said. The average pension paid retirees, other than firefighters and police, is $21,000 a year.

2. The money paid out to retirees stays in New York, benefiting the state’s economy. About 80 percent of the people who receive a pension remain in the state, DiNapoli said.

3. The state’s pension plan is 92 percent funded and that’s a good asset to have when New York goes out to borrow money, he said. The health of the state’s pension plan is one of the things financial agencies look at when they issue bond ratings. Those ratings in turn affect the ability of the state and local municipalities to borrow.

4. New York has responded to current economic conditions by curtailing pension benefits for newly hired state employees. Local governments that have had a turnover in employees saw a savings as a result, DiNapoli said.

5. Twice in the past two years the state has cut the rate local governments pay into the system, he said.

6. Switching to a defined contribution plan won’t change the state’s obligation to provide a pension to the 1 million people already in the system, DiNapoli said. Plus, it would create retirement insecurity for even more New Yorkers. “A 401(k) was never meant to be the substitute for a pension,” DiNapoli said.

DiNapoli is leading Antonacci in the polls by double digits.

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New York Comptroller Candidates Square Off on Pensions

The New York State Comptroller serves as the sole trustee of New York’s $176.8 billion retirement system. So it’s not surprising that pensions were among the first issues broached during Wednesday night’s televised debate between the two candidates for Comptroller, incumbent Thomas DiNapoli (D) and newcomer Robert Antonacci (R).

Antonacci voiced several of his gripes with the state’s pension system; he claimed the assumed rate of return was too high and that the system should take on more characteristics of a 401(k)-style plan. From the Democrat and Chronicle:

Antonacci, who since 2007 has served as Onondaga County comptroller, took several opportunities to criticize DiNapoli’s oversight of the system. The pension fund’s assumed rate of return of 7.5 percent, Antonacci said, was too high.

A certified public accountant, Antonacci also said he believes the state should move toward offering defined-contribution retirement plans — what many would think of as a 401k-style plan. State and local-government employees currently receive defined-benefit plans, in which the payout at the time of retirement is determined by a formula and not subject to the whims of the stock market.

“We have to make some fundamental changes to the pension fund, including talking about a defined-contribution plan,” Antonacci said.

DiNapoli disagreed, saying a move to a 401k-style system would hurt working New Yorkers. He touted the performance of the pension fund — which is consistently ranked as one of the best-funded public plans in the country — while acknowledging his office may decide to lower the assumed rate of return in the future.

“Moving to defined contribution would put more and more New Yorkers at risk of not having adequate income in their golden years,” DiNapoli said. “That would be a bad choice for New Yorkers.”

DiNapoli is leading in the polls by 28 percent.

Photo by Awhill34 via Wikimedia Commons

New York’s Sole Pension Trustee Faces New Competition In Election

Two-term New York Comptroller Thomas DiNapoli is the sole trustee of New York’s largest pension funds, but he’s now facing competition from an unlikely source: a local auditor named Robert Antonacci who claims he is more qualified than DiNapoli.

From The Associated Press:

Democratic New York Comptroller Thomas DiNapoli, chief financial officer for the state, faces an election challenge from a little-known accountant and lawyer who does similar work for Onondaga County and says he’s more qualified.

Robert Antonacci said the power of the checkbook is the key to whether state programs — such as economic development projects — are delivering. The 49-year-old Republican also said that following the flow of money through politics is how you clean up corruption.

“You can really get into the engine of government from the experience I have,” Antonacci said. “We’re going to look at everything in terms of what makes New York state tick.”

State economic development efforts, seeding proposed business expansions with tax breaks, funding or other support in return for promised jobs, will be a big initiative if he’s elected, Antonacci said. The Cuomo administration’s Start-Up New York program is one place the comptroller should be looking and verifying data, he said.

“We’re going to start with the governor and the Legislature, not the village of Podunk,” he said, referring to the mission of the comptroller’s office to audit government entities small and large.

[…]

“When you talk about getting at the underbelly of how governments run, as a CPA I have 30 years of experience of understanding how business operates,” he said. “The data is the key, and when you’ve got a CPA looking at a financial statement it’s a lot different than somebody who doesn’t have that experience.”

Both candidates have addressed the state’s pension system, as managing the fund’s investments is a large part of the comptrollers job. From AP:

[DiNapoli’s] stewardship has helped New York’s pension fund for public workers rebound from the 2008 national recession and grow to a record $181 billion, with state and municipal contribution rates declining for 2015 and 2016, he said.

[…]

As for the state’s $180 billion pension fund, Antonacci said his goal will be maximizing the return to taxpayers and not shareholder activism.

DiNapoli, as the pension fund’s sole shareholder, has sponsored shareholder resolutions at large corporations calling for more complete disclosures of their political activities, environmental practices and workplace standards at the overseas factories of suppliers. DiNapoli said those measures help protect shareholders, their investments and the companies from potential risks.

The election will be held Nov. 4.

Photo by Awhill34 via Wikimedia Commons