DiNapoli Reports 'Worst Year in Memory' for State Pension Fund

June 1, 2009 (PLANSPONSOR.com) - New York State Comptroller Thomas P. DiNapoli's office reported on Friday that the state pension fund lost 26.3% for the year ended March 31.

DiNapoli called it “the worst year in anybody’s memory,” according to a New York Times news report. Overall, the fund’s value now stands at $109.9 billion, down from $153.9 billion a year earlier.

The loss, which does not reflect the contributions and payouts into and out of the pension system last year, will require the local governments outside New York City that use the pension system to increase their contribution rates for the first time in several years, the news report said.

DiNapoli refused to give details of the performances of the private equity firms that have been at the heart of investigations by Attorney General Andrew M. Cuomo and the Securities and Exchange Commission into allegations that aides to DiNapoli’s predecessor, Alan G. Hevesi, sold access to the fund to investment firms for millions of dollars.   However, he said he continued to support increasing the amount that the pension fund can invest in private equity firms, hedge funds, and other so-called alternative investments.

The times said DiNapoli deflected a question about a new pension conduct code, signed onto by City Comptroller William C. Thompson Jr. (see NYC’s Thompson Backs SEC Private Placement Agent Regulations ), which includes broad bans on politicians or anyone else acting as intermediaries between investment firms and public pensions, or even making introductions. DiNapoli has so far not committed to adopting the code, although he previously instated his own measure (see DiNapoli Bars Placement Agents for Empire State Fund ).