ALBANY, N.Y. (AP) – The state Insurance Department has tightened ethics controls over New York's massive public employees' pension fund and is expected to consider similar safeguards for the public pension funds supporting retired teachers and New York City public employees.
The new measures announced Wednesday target conflicts of interest that led to scandal in the fund under the previous comptroller, Democrat Alan Hevesi, who resigned under pressure earlier this year.
State Insurance Superintendent Thomas Dinallo has bolstered regulations to make ethical standards more strict for all workers in the comptroller's office, ban campaign contributions by staff members, and create a permanent inspector general's position to investigate ethics complaints.
State Comptroller Thomas DiNapoli ordered many of the changes after he succeeded Hevesi, who quit after a scandal involving his use of state workers to drive for his wife. State and federal investigators are also investigating whether Hevesi's friends and relatives received lucrative fees in deals involving the pension fund.
Fees paid by companies seeking investments by the fund — and who received them — will now be reported, Dinallo said.
“If you know whose being paid, you can ask the question, `Why?'” Dinallo said. Dinallo led many of the biggest cases in the Attorney General's office under Eliot Spitzer, including probes that ended several conflicts of interest on Wall Street.
Dinallo said the law allows for regulations to “grow and change” with the times, but this is the first major change in decades.
Next up for review and more extensive auditing are the state teachers' retirement fund and the five public pension funds in New York City, Dinallo said. He said he will likely increase his pension fund auditing staff to handle the new, more extensive evaluations.
DiNapoli, who took office in February, said Wednesday the pension fund, valued at more than $150 billion, hasn't been hurt by the scandals. He said that fund, which pays the retirement checks of state, local and many public school workers, is funded at 104 percent of its future obligations. That compares to a national average of 88 percent, DiNapoli said.
“The fund is sound and secure,” he said.
His assessment comes as public and private pension funds have been raided or dissolved, leaving workers without their retirement benefits.
“Recent events have illustrated the importance of protecting the integrity of the state pension fund,” Spitzer said in announcing the changes Wednesday. “The new regulations increase reporting and transparency, create independent committees to oversee key areas, and strengthen supervision by the Insurance Department.”