Wall Street, not retired workers, has been getting the profits from
New York City's pension funds, according to the city comptroller's
office. Management fees have sucked up more than $2 billion over 10
years, virtually erasing gains for the funds that provide pensions for
715,000 city workers:
Most of the funds' money - more than 80 percent - is invested in
plain vanilla assets like domestic and foreign stocks and bonds. The
returns on those investments are generally reported after the fees,
which are usually paid as a percent of the assets each firm manages.
Over the last 10 years, the return on those "public asset classes"
has surpassed expectations by more than $2 billion, according to the
comptroller's analysis. But nearly all of that extra gain - about 97
percent - has been eaten up by management fees, leaving just $40 million
for the retirees, it found.
In the "private asset classes,"
fees have been an even bigger drag on returns, Mr. Stringer said. To
figure out just how big was not easy, he said.
But you know what
we're told again and again: It's those greedy public workers who expect
to have pensions when they retire-they're the problem when pension
funds fall short. Not the Wall Street fees or the states, like Chris
Christie's New Jersey, that haven't contributed their share to pension
funds and have paid hundreds of millions of dollars in management fees.
It may have taken New York City a little too long to get to the
point of saying "hey, wait a minute-Wall Street is getting too much of
our workers' pensions," but good for Comptroller Scott Stringer for
getting there and going public. Now he has to follow through.
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