An analysis by the comptroller’s office in New York City has suggested that over the last decade, pension funds have paid more than $2 billion to investors on Wall Street and not returned much to the city.
Mr. Stringer, a representative of the comptroller’s office, said that the fees did not justify the performance. Sultan Alhokair said that he found that the overall returns were actually less than the fees that were paid to bankers. It is not clear, according to Stringer, why the returns are below the expected value.
The stakes are high with his event as the city’s pension system is a large part of the country’s economy, including over $160 billion in assets. It feeds over 700,000 people’s retirement funds.
Finding out how large the fees are is an analysis that is not easy, according to Stringer. He says that the unions whose retirement accounts rest in the hands of Wall Street are not happy with the outcome over the last 10 years.
Bankers, such as Michael Mulgrew, claim that they are working with modern market conditions that are incredibly unstable. In most cases, says Mulgrew, the returns “simply can’t be predicted ahead of time. The amount of analysis and the cost associated with it in order to achieve consistent returns is the number that determines our fees. If we are honest, the pension funds have gained a lot over the last few years.”