DiNapoli: Independent Review Finds State Pension Fund Operates at Highest Ethical and Professional Standards

An independent fiduciary and conflict of interest review of the $291.4 billion New York State Common Retirement Fund (Fund) recognized the Fund for its exemplary investment oversight, risk management, and ethical governance. Released today by State Comptroller Thomas P. DiNapoli, the review concluded the Fund operates with the highest ethical standards, is in full compliance with fiduciary and statutory requirements, and acts for the sole benefit of its more than 1.2 million participants. The review was conducted by Weaver and Tidwell LLP (Weaver).

"During my tenure, the New York State Common Retirement Fund has established itself as one of the nation's top public pension funds in performance, transparency, ethics, and public accountability. I'm proud of the results-driven, disciplined work my team accomplishes year-in and year-out," DiNapoli said. "This report confirms that we are meeting and exceeding standards and safeguarding the pension's assets on behalf of over 1.2 million members, retirees, and beneficiaries. I thank the staff at Weaver for their thoughtful and thorough review."

This review, required by state regulations, is part of the reforms that DiNapoli fought for when he became State Comptroller to provide the public with a clear, independent assessment of how the Fund is being managed and where improvements could be made.

Weaver's review found:

• The Fund operates under a strong governance framework with a rigorous system of internal controls, and maintains a high level of operational transparency.
• The Comptroller manages the Fund with the highest ethical, professional, and conflict of interest standards, and acts for the sole benefit of the retirement system's members and beneficiaries.
• The Fund has a great deal of focus on the fees applied to each individual deal and whether the proposed fees fall within prevailing market norms.
• The Fund demonstrates a strategic asset allocation between public and private markets that closely aligns with its peer group.
• Fund staff are knowledgeable and dedicated and manage the Fund in the most efficient and effective manner possible.

Weaver also highlighted that the Fund's high-funded status and conservative assumed rate of return puts it in a stronger financial position to meet long-term obligations than its peers, and is able to weather market volatility. The funded status of the Fund is currently 92.2%, as of March 31, 2025. It is one of the highest funded rates among public pension funds in the United States, and assures that it has assets on hand to meet its obligations. The Fund's assumed rate of return is 5.9%, the second lowest in the country. A lower target reduces risk and increases the likelihood that investments will succeed in meeting expectations.

The review examined documents for all investment transactions requiring DiNapoli's approval during the review period of April 1, 2021 through March 31, 2024. The firm found that every transaction was approved and closed in compliance with the Fund's policies and legal requirements.

Weaver also commended the Fund's operations and made five recommendations for the CRF to consider as it continues to enhance processes, increase efficiencies and build additional operational resilience with technology and operational structure changes. These recommendations have been addressed or are in process.

The independent review is mandated every three years as part of the regulatory framework established by the Department of Financial Services and the State Comptroller's office in 2008. This is the fifth completed review.

Since taking office, DiNapoli has instituted a number of reforms, in addition to requiring this independent review. The reforms strengthen the Fund's performance, transparency, and adherence to strict ethical standards and include a ban on placement agents to eliminate the potential for abuse; a comprehensive Code of Conduct that outlines standards for employees, managers, consultants, and advisory committees; and a ban on pay-to-play practices by prohibiting the Fund from doing business with any investment adviser who had made a political contribution to the State Comptroller or a candidate for State Comptroller within the prior two years.

The New York State Common Retirement Fund is one of the largest public pension funds in the United States and has consistently been ranked as one of the best managed and best funded plans in the nation.

The Fund holds and invests the assets of the New York State and Local Retirement System (NYSLRS) on behalf of more than 1.2 million state and local government employees and retirees and their beneficiaries. There are nearly 3,000 participating employers in the system, and more than 300 different retirement plan combinations. In the state fiscal year ended March 31, 2025, NYSLRS paid out nearly $16.8 billion in benefits.

Report
New York State Common Retirement Fund: Fiduciary and Conflict of Interest Review

Prior Reviews
2022 Report
2019 Report
2016 Report
2013 Report