New York pension plans fiduciary review

The fiduciary review at the Thomas DiNapoli-led state pension comes on the heels of New York state permanently banning placement agents in an effort to curb conflicts of interest.

Three months after New York wrapped up its “pay to play” investigation, the state’s $146 billion pension fund is planning to conduct a conflict of interest review.

New York Comptroller Thomas DiNapoli, who serves as the pension’s sole trustee, is searching for a firm to review “investment-related policies, procedures, and practices to bring them in line with common and/or best practices”, according to pension documents.

The review will cover the fund’s private equity investments and procedures. The selected firm will also review whether the fund maintains an appropriate level of operational transparency, according to documents.

The fiduciary review comes on the heels of New York state permanently banning placement agents in an effort to curb conflicts of interest.

In April, Governor Andrew Cuomo directed New York’s insurance department to issue permanent regulations banning placement agents, lobbyists and elected officials from conducting business with the state’s pension fund. The new regulations also contain new provisions that permanently ban “pay-to-play” at the pension fund.

The regulations prohibit improper relationships between pension fund officials and an investment firm's personnel, “revolving door” employment by investment firms of former public pension fund officials and employees and improper gifts by investment firms to public pension fund employees. The regulation also bans investment firms that directly or indirectly make campaign contributions, charitable contributions, or gifts to the comptroller.