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Taxpayers foot $850M bill for Wall St.’s pension fees
Posted By aaron On April 12, 2011 @ 2:44 pm In Economic Crisis | Comments Disabled
April 12, 2011
New York City taxpayers are helping to pay $850 million in Wall Street investment fees — even as these financial gurus have produced only meager results for strapped city and state pension funds.
City Comptroller John Liu this week released a comprehensive analysis of NYC pension costs over the past decade, revealing why they have risen from $1.2 billion to $7.7 billion.
Liu said one of the major factors in the shortfall was higher than expected investment and administrative fees, which were $71 million in 2005, and have risen more than four-fold to $313 million.
Nearly all of the increase was due to the pension funds shifting asset allocation in favor of private equity and real estate — chasing bigger returns — but which also have higher investment fees, he wrote.
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