Submitted by George N. Spitz, Feb 23, 2007 03:41

That pension funds have been invested in Iran is just one of the many reasons the New York State Retirement System has been such a drain on the budgets of New York's State and Local Governments. Speculative and so-called socially desirable investments have also played a role. In 2002, New York State and it's Counties, Towns, Villages and School Districts contributed $263.8 million to the pension fund. Thanks to poor investment policies by Tom DiNapoli's disgraced predecessor, Alan Hevesi, the State. Local Government and School District share of pension costs totaled over 10 times as much, $2,782.1 million (nearly $2.8 billion). The dysfunctional Legislature, which included new Comptroller Tom DiNapoli, provided no oversight over Hevesi's investment policies.

The $142.6 billion pension fund assets invested in bonds averaging 4.28 percent would have been sufficient to cover the $6.15 billion in annual retiree benefits without any contributions from either New York State and its local governments, or for that matter the employees who contributed $$241.2 million as they are required by union contracts and state laws. Since the annual growth in pension costs has been the neighborhood of $400 million a year, reducing the State and Local Government contributions equitably to the same level as employees, would enable the New York State Retirement System to have not only sufficient funds on hand to meet the amount required to pay benefits, but also accumulate a surplus for a future rainy day.

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