Some Fridays you\u2019ll find Drew Warshaw by the big brass bull near Wall Street holding an oversized check for $21 million. It represents the fees that the New York state retirement fund is paying to money managers.<\/p>\n
It\u2019s also a cornerstone of Warshaw\u2019s campaign to unseat state Comptroller Tom DiNapoli in next year\u2019s Democratic primary. Warshaw says DiNapoli should be doing more to tackle the state\u2019s affordability crisis. He wants to bring fresh energy to an office that isn\u2019t on most people\u2019s radars, but has tremendous reach.<\/p>\n
\u201cTo have the opportunity and the power to attack the affordability crisis head on is a dream job, and we have got to stop treating these positions like lifetime appointments,\u201d he said.<\/p>\n
The comptroller is in charge of the New York State Common Retirement Fund, a $284 billion investment pool that is one of the nation’s largest public retirement plans. How that money is invested \u2013 and how well those investments perform \u2013 have a big impact for taxpayers.<\/p>\n
DiNapoli is running for a fifth term as the state\u2019s top fiscal officer. He says he\u2019s doing solid work, even if it\u2019s somewhat unglamorous.<\/p>\n
\u201cGiven all the challenges out there, all the polarization, I think [it\u2019s important] to have a steady hand in this very important office,\u201d he said. \u201cIt may not be the front page of the paper office, but it is an office that’s very key to the operations of state government.\u201d<\/p>\n
Warshaw says he would take $10 billion of the pension fund and devote it to affordable housing projects in the state. He started his career as an aide to former Gov. Eliot Spitzer and also worked at the Port Authority of New York and New Jersey. He later led companies developing solar power and affordable housing.<\/p>\n
\u201cWhen I talk about starting the largest affordable housing fund in the United States, I’m speaking about that from direct experience,\u201d he said. \u201cWe can get a strong rate of return for the pension fund and still invest in homes that New Yorkers can afford.\u201d<\/p>\n
The latest disclosure report shows 14% of the pension fund\u2019s holdings are in real estate. DiNapoli said some of that was affordable housing, but the exact figure isn\u2019t disclosed. DiNapoli said the affordable housing push is \u201ca talking point and it’s not responsible to what the purpose of the fund is.\u201d<\/p>\n
Indeed, the point of the fund is to provide long-term gains.<\/p>\n
Most public employees in New York get a traditional, defined-benefit pension. That means the payments they receive are determined by how long they worked and how much money they made in their final years.<\/p>\n
To cover those promised payments, state and local taxpayers contribute a set amount each year to the fund. But it\u2019s not enough to cover all the pension costs. It instead is put into investments that will hopefully grow over time to make up the difference and keep the taxpayer contributions as low as possible.<\/p>\n
Since taking office in 2007, DiNapoli has put a larger share of the pension fund into private equity and real estate investments. Most of the fund\u2019s money is in stocks and bonds, but the pension fund also owns some smaller businesses, as well as buildings.<\/p>\n
DiNapoli, who previously served for two decades in the state Assembly, says it\u2019s important to have diverse holdings. He said that when markets dip, private equity investments can provide stability in the overall rate of return.<\/p>\n
\u201cIf you want to ride the roller-coaster of the public markets, what you’re going to do is have a whipsaw in your contribution rates for the government employers,\u201d he said.<\/p>\n
Warshaw challenged that. The fund paid around $1.1 billion in fees in the 2024 fiscal year for investment managers. The charges are much higher on complicated investments like private equity than they are on stocks or simple mutual funds that track entire stock indexes.<\/p>\n
\u201cHe\u2019s paying all of these fees that the taxpayers fund through income taxes and property taxes to a bunch of Wall Street bankers to try and beat the market,\u201d Warshaw said. \u201cHe\u2019s underperformed his own benchmarks.\u201d<\/p>\n
Hence the oversized checks for $21 million \u2014 what Warshaw calculates is the weekly amount of fees paid.<\/p>\n