Metro

Mike, Liu eye funds merger to up returns

The city’s $120 billion pension system is set for a major overhaul intended to lower the cost to taxpayers and weed out the potential for corruption, Mayor Bloomberg and Comptroller John Liu announced yesterday.

Bloomberg and Liu, usually at odds over city policy, stood side by side at City Hall to introduce a plan to merge the city’s five pension boards into one, with an independent manager who would make investment decisions without political interference.

Liu currently has authority over the management of all the pension funds, though he cannot veto decisions that individual boards make on how to invest retirees’ money.

In agreeing to the new concept, which needs approval from the state Legislature and Gov. Cuomo, Liu is ceding a tremendous amount of power by handing over his Bureau of Asset Management to the manager of the proposed consolidated fund.

“We’ll reduce consultant costs and transaction fees, and pension assets will be invested more efficiently than they are currently,” said Bloomberg, who has long complained of the tremendous burden that the rising costs of pensions place on taxpayers.

Liu said the move “will enhance our investment returns and lower pension costs as well as protect our current and future retirees’ pensions, improve accountability and guard against the possibility of fraud and corruption.”

The Comptroller’s Office still has plenty to handle, overseeing the city’s finances, auditing agencies and reviewing all contracts.

The comptroller noted that similarly run pension funds in other cities have seen their annual gains improve by 1 to 2 percent — which, he said, would translate into at least $1 billion more a year for the city’s merged pension fund.

“We’ve been working diligently to reduce the cost of public pensions on the taxpayers. We look forward to reviewing the city’s proposal when we receive it,” said Cuomo spokesman Josh Vlasto.


sgoldenberg@nypost.com