Comptroller Thomas DiNapoli has hiked the total amount of money Albany pays Wall Street firms to manage the state pension fund by “a staggering 163 percent’’ — even as fund earnings have plunged into negative territory, an explosive new study has found.
The increase, which saw fee payments skyrocket from $161.8 million in 2007 — the year DiNapoli took office — to $425 million last year, added an additional $768 million to costs associated with the pension system over the past five years, according to a study conducted by the state Senate’s Independent Democratic Conference.
“Hedge funds seem to be negotiating [state] fees that look an awful lot like ‘Heads we win, tails you lose,’ ’’ says the study, a copy of which was obtained by The Post.
“In 2008, when hedge funds grew our investments by 2 percent, the pension fund paid $50 million in fees. But the next year, in 2009, when hedge funds sunk our investments by 20 percent, the pension fund again paid almost $50 million in fees,’’ the study continued.
Not every firm got a raise — in fact, some took a cut. The 163 percent figure represents the total funds handed out to all the financial companies the state pension system deals with, including some hired since 2007.
The study also faults DiNapoli for failing to publicly disclose the performance of each of the management firms being utilized by the $100-billion-plus pension fund or the agreements that have been signed with them.
DiNapoli is the sole trustee of the fund.
The study — sure to prove embarrassing to DiNapoli, a Democrat — is slated to be released today.
“While I believe those entrusted with managing our pension money deserve to be fairly compensated for good performance, it seems that instead of making money for us, some Wall Street institutions are simply allowed to just make money off us,’’ said state Sen. Jeff Klein (D-Bronx), co-chair of the Task Force on Government Efficiency and the IDC leader.
“It’s clear that New York is not getting the best bang for its buck with this arrangement,’’ Klein continued.
A spokeswoman for DiNapoli had no immediate comment.
The IDC’s blast at DiNapoli comes as word circulated in state political circles that DiNapoli’s standing with the public has taken a sharp plunge as a result of his refusal to back Gov. Cuomo’s efforts to curtail the skyrocketing costs of state and local government pensions.
A new Siena College poll slated to be released today is expected to show a sharp drop in DiNapoli’s approval rating, insiders said.
DiNapoli was a longtime Nassau County assemblyman until early 2007, when he was selected by Democrats in the Legislature to succeed Comptroller Alan Hevesi, who resigned in disgrace.
DiNapoli was narrowly elected to a full four-year term in 2010, but only with an all-out effort from the public-employee unions, to whom he has publicly offered thanks.
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DiNapoli, meanwhile, is being praised for resisting Cuomo’s pension reforms by fellow Democrats in the Legislature, who view him as a helpful “flak catcher.”
“He’s being a good comptroller,’’ one of the Assembly’s top Democrats said laughing.
“By being the high-profile opponent to Cuomo, he’s taking the heat off the Democrats in the Legislature,” said a source close to top lawmakers.
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Senate Majority Leader Dean Skelos (R-Nassau), nervous about opposition from public-employee unions, continues to duck nearly all questions on whether he supports Cuomo’s plan for a new Tier VI pension system that would save state taxpayers $93 billion over 30 years.
Over several days, Skelos repeatedly refused to say whether he supports Cuomo’s proposals to end the abuse that allows public workers to run up high overtime payments in order to inflate their pensions, to increase employee contributions, and to raise the retirement age from 62 to 65.
The only part of Cuomo’s plan that Skelos would commit to supporting is an optional 401(k)-like retirement plan, which provides a relatively small amount of cost savings to the state.