As Pension Fund Lagged, Contributions to Comptroller Grew[NYC]

The New York Times ^ | 18 Aug 2009 | MICHAEL BARBARO and RUSS BUETTNER

[BGHater]

The New York city comptroller, William C. Thompson Jr., is staking his mayoral campaign on his skills as a financial manager, which he says are exemplified by his supervision of the nation’s largest municipal pension system.

But a review of how the $80 billion system has performed since he took office shows it has consistently lagged behind many of its public pension peers even as the city tripled the number of money managers it uses and the fees that it pays those firms.

Over the last seven years, four of the five city pension funds performed below the median for similar funds around the country. In fact, more than two-thirds of big public pension funds did better than the city’s largest fund, the New York City Employees’ Retirement System, according to a widely used financial yardstick compiled by Wilshire Associates, an investment advisory firm.

“It’s consistently below average, and that’s not where you want to be,” said Edward A. H. Siedle, president of Benchmark Financial Services, a Florida firm that audits pension plans.

But Mr. Thompson has benefited from his association with the pension system, collecting more than $500,000 in campaign contributions from its growing roster of money managers since he first entered the 2001 race for comptroller. In some cases, the executives gave to Mr. Thompson just months before the pension funds hired them to manage tens of millions of dollars, according to interviews and public records.

In an interview, Mr. Thompson, the Democratic Party’s leading mayoral contender, said there was no connection between the contributions and the work that the managers received. He defended the performance of the pension funds, pointing to the turbulence in the stock market to explain some of the lackluster results.