Some Fridays you’ll find Drew Warshaw by the big brass bull near Wall Street holding an oversized check for $21 million. It represents the fees that the New York State retirement fund is paying to money managers.
It’s also a cornerstone of Warshaw’s campaign to unseat State Comptroller Tom DiNapoli in next year’s Democratic primary.
Warshaw said DiNapoli should be doing more to tackle the state’s affordability crisis. He wants to bring fresh energy to an office that isn’t on most people’s radar, but has tremendous reach.
“To have the opportunity and the power to attack the affordability crisis head on is a dream job, and we have got to stop treating these positions like lifetime appointments,” he said.
The comptroller is in charge of the New York State Common Retirement Fund, a $284 billion investment pool that is one of the largest public retirement plans in the nation. How that money is invested and how well those investments perform have a big impact for taxpayers.
DiNapoli is running for a fifth term as the state’s top fiscal officer. He said he’s doing solid work, even if it’s somewhat unglamorous.
“Given all the challenges out there, all the polarization, I think [it’s important] to have a steady hand in this very important office,” he said. “It may not be the front page of the paper office, but it is an office that's very key to the operations of state government.”
Warshaw said he would take $10 billion of the pension fund and devote it to affordable housing projects in the state. He started his career as an aide to then-Gov. Eliot Spitzer and also worked at the Port Authority of New York and New Jersey. He later led companies developing solar power and affordable housing.
“When I talk about starting the largest affordable housing fund in the United States, I'm speaking about that from direct experience,” he said. “We can get a strong rate of return for the pension fund and still invest in homes that New Yorkers can afford.”
The latest disclosure report shows 14% of the pension fund’s holdings are in real estate. DiNapoli said some of that was affordable housing, but the exact figure isn’t disclosed. DiNapoli said the affordable housing push is “a talking point and it's not responsible to what the purpose of the fund is.”
Indeed, the point of the fund is to provide long-term gains.
Most public employees in New York get a traditional, defined-benefit pension. That means the payments they receive are determined by how long they worked and how much money they made in their final years.
To cover those promised payments, state and local taxpayers contribute a set amount each year to the fund. But it’s not enough to cover all the pension costs. It instead is put into investments that will hopefully grow over time to make up the difference and keep the taxpayer contributions as low as possible.
Since taking office in 2007, DiNapoli has put a larger share of the pension fund into private equity and real estate investments. Most of the fund’s money is in stocks and bonds, but the pension fund also owns some smaller businesses, as well as buildings.
DiNapoli, who previously served for two decades in the state Assembly, said it’s important to have diverse holdings. He said that when markets dip, private equity investments can provide stability in the overall rate of return.
“If you want to ride the rollercoaster of the public markets, what you're going to do is have a whipsaw in your contribution rates for the government employers,” he said.
Warshaw challenges that. The fund paid around $1.1 billion in fees in the 2024 fiscal year for investment managers. The charges are much higher on complicated investments like private equity than they are on stocks or simple mutual funds that track entire stock indexes.
“He’s paying all of these fees that the taxpayers fund through income taxes and property taxes to a bunch of Wall Street bankers to try and beat the market,” Warshaw said. “He’s underperformed his own benchmarks.”
Hence the oversized checks for $21 million — what Warshaw calculates is the weekly amount of fees paid.
DiNapoli said it’s difficult to value private-equity holdings year to year, because they can take as long as a decade to pan out. Between 2015 and 2025, the fund has posted an average annual rate of return of 7.74%. The national average of public pension plans calculated by Boston College during that time was 7.4%. The S&P 500 Index had an average rate of return of around 10.7% over the same period.
That’s higher than the 5.9% long-term target rate for the fund. DiNapoli says the figure is “conservative, in terms of being responsible and not wildly chasing returns or just chasing after shining objects because it may sound good to other people.”
Warshaw said it’s too low, and that’s “costing taxpayers money.”
