, Columnist
Hey New York, Check Out Calpers
New York City's pension fund might save money by bringing asset management in-house.
His nest egg could use the help.
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People seem to be genuinely shocked by a new report out of New York City’s Comptrollers Office. The report found that the city’s public employee retirement fund pays big fees to Wall Street but gets little in return.
However much anyone is shocked, they really shouldn't be. That's because the high cost of hiring outside money managers to oversee the city's retirement assets was entirely predictable. As Bloomberg reported in 2013, New York City is “the only one of the 11 biggest U.S. public-worker pensions that refuses to manage any assets internally.” That alone suggests that the city is paying disproportionately high fees compared with pensions that manage some or all of their funds in-house.