No sooner had a trial balloon been floated, in yesterday’s Daily News, about replacing the state comptroller as the sole trustee of the state’s $154 billion Common Retirement Fund than the entrenched interest in Albany started to fight back against the idea. So we gather from reporting by our Jacob Gershman, whose article on page one of today’s New York Sun indicates that talk of changing the system to a board with several trustees is getting a chilly reception.

It’s certainly hard to complain about the returns the fund has earned lately. It returned 12.6% for the fiscal year ending March 31, and a press release from the comptroller notes that “The Wilshire’s Trust Universe Comparison Service, the most widely accepted benchmark for the performance of institutional assets, ranks the Fund’s results in the top 10th percentile of public funds.”

Even so, giving one individual such unlimited power over so much taxpayer money makes many uneasy. There’s a powerful temptation for the comptroller to raise money from lawyers who want to represent the fund and from money managers who want to be hired to invest portions of its assets. It could be argued that adding other politicians to the board would just make it easier for all of them to avoid responsibility and require those who want to influence the fund’s decisions to give to more politicians rather than simply the comptroller. The New York City Employees’ Retirement System has such a board and its performance has lagged.

But so long as the matter is being discussed, we have a couple of suggestions. The first is that if the legislature does decide to replace the comptroller as the sole trustee with a board that has more members, it should require the members to actually attend the meetings themselves as opposed to allowing them to designate representatives to attend the meetings for them. The New York City Employees’ Retirement System board members have made a habit of sending aides to attend the meetings instead of showing up themselves, a practice we pointed out in a February 28, 2007 editorial, “Absentee Trustees.”

The second is to wonder why a politician is in charge of investing the retirement savings of state workers in the first place. In the private sector, individual workers increasingly make their own investment decisions in 401k plans and, at non-profits, 403b plans. New York State already lets individuals manage college savings for their children in 529 accounts. Whenever we write about this topic we get a letter to the editor from E.J. McMahon reminding us that the state retirement fund isn’t actually a retirement fund at all in the traditional sense, because the state’s taxpayers are on the hook for a defined benefit no matter how the fund performs. It’s more of a reserve fund.

But that only underscores the desirability of changing the state’s practices going forward so that state workers, rather than the taxpayers and a single politician-investor running $154 billion, are responsible for their own retirement security. Otherwise the state runs the risk of turning into another General Motors, an institution so burdened by its health-care and pension obligations to its retired unionized workforce that it is unable to successfully compete in the global economy.