The state Department of Financial Services says it will investigate salary spiking in the state’s pension funds and potential conflicts of interest among consultants used to oversee the funds – which are among the largest in the country.
Benjamin Lawsky, the agency’s commissioner, wrote in letters this week that the agency will audit the public-pension funds. The letters went to the New York City pension fund, the state pension fund and the New York Teachers Retirement System.
“These are huge funds that provide for the retirement of millions of New Yorkers. And they are supported by billions of dollars in taxpayer money,” Lawsky wrote. “Indeed, the recent financial difficulties in Detroit serve as a stern wake-up call, demonstrating why strong oversight of New York’s public pension funds is so important.”
In 2011, the state insurance and banking department were combined into the state Department of Financial Services. The Insurance Department was the regulator for the state’s public pension systems.
Lawsky wrote that the agency would investigate whether current pension procedures are rooting out salary spiking – in which employees get significant overtime and salary increases in their last year before retirement to boost their pensions.
Lawsky said in July he would investigate the funds, and in August charged that the state’s $160 billion pension fund relies on computer programming that dates back to 1959.
There was no immediate comment today from the pension funds.