The leaders of two of the nation’s largest public pension funds today announced an initiative to protect public funds from conflicts of interests. They recommended that every money management firm retained by a state investment officer must disclose: any client relationship, including management of corporate 401(k) plans, in which the firm could invest state or pension fund money in the client’s securities; how their portfolio managers and research analysts are compensated; and the amount of commissions paid to broker-dealers and the percentage of commissions paid to broker dealers that have publicly announced they have adopted these principles. Also, managers must consider a company’s accounting and financial data and its corporate governance policies before investing in a firm.
The initiative was announced by H. Carl McCall, New York state comptroller and head of the $112 billion New York State Common Retirement Fund, Albany; and Richard Moore, North Carolina treasurer, who oversees the $59 billion North Carolina Retirement Systems, Raleigh. Also joining in the initiative were Eliot Spitzer, New York state attorney general, and Philip Angelides, California state treasurer.
