Requires the state comptroller to disclose information related to the management fees for the investment of the moneys in the New York state retirement fund

Summary of provisions

Section 1: Amends the Retirement & Social Security Law section 11 (d) to require that the Comprehensive Annual Financial Report issued by the State Comptroller which outlines the financial performance of the New York State Retirement Fund must be posted on the internet so that it is easily accessible to the general public for their review.

Section 2: Amends the Retirement & Social Security Law section 11 to add a new subsection (d-1) which relates to the preparation of the New York State and Local Retirement System Comprehensive Annual Financial Report. This bill provides that the State Comptroller, in preparing such annual financial report, shall disclose the name and address of each fund manager that manages or administers a fund or investment portfolio, the name of such fund, and the value of assets under such management. Further, that such disclosure shall list for each fund, the average annual net return and the gross management fee to managed such fund and for all funds in aggregate. In disclosing the gross management fee, such fee shall be broken down into its component parts such as management, brokerage, incentive, performance, and administrative fees, equity commissions, and other expenses related to the management of such fund. In addition, to better reflect and compare the risk and volatility of the fund being managed with the corresponding gross management fees being charged, the disclosure of such fees shall be organized by the type of asset, fund, or portfolio of the fund that is being managed. Such break down of fund or asset type can included, but is not limited to domestic international and blended domestic & international equity markets, fixed income portfolios, real estate portfolios and other alternative investment portfolios that are utilized by the State Comp- troller to manage investments for the New York State Retirement System.

This section also provides definitions for terms such as fund, fund manager, gross expense ratio, and gross management fee.

Section 3: Amends Retirement & Social Security Law section 311(d) to require that such Annual comprehensive Financial Report as it relates to the New York State and Local police and Fire Retirement Fund shall also be posted on the internet to facilitate such reports review by the general public.

Section 4: Amends Retirement & Social Security Law section 311 to add a new (d-1) which relates to the preparation of the Comprehensive Annual Financial Report for the New York State and Local police and Fire Retirement System. All of the disclosures described above in bill section one are required to be disclosed by this bill section 2 as well.

Justification

A recent analysis of the New York State and Local Retirement system's Comprehensive Annual Financial Report found that there is an asymmet- rical upward trajectory in the amount of money charged for management fees, while the overall investment performance of such retirement investment portfolios has declined. By enacting this legislation, taxpayers, beneficiaries, and outside experts will be able to: (1) more fully analyze the reasons underlying this asymmetry between the increased management fees charged by fund managers to manage funds and the returns obtained by such fund managers (2) provide recommendations to the Office of the State Comptroller to identify ways to enhance the efficiency and performance of the New York State and Local Retirement System.

Legislative history

New Bill.

Fiscal implications

This bill should better identify and hopefully curtail future increases in management fees paid to fund managers that contract with the State Comptroller to manage individual component fund parts that make up the aggregate investment portfolio of the New York State Retirement system. These cost savings could then be translated into smaller required payments by New York State and local governments to support the New York State and Local Retirement System.

Effective date

The act shall take effect on the first of January next succeeding the date on which it shall have become law, and shall apply to annual reports made after such date.