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NYSCRF Fiduciary and Conflict of Interest Review

NYSCRF Fiduciary and Conflict of Interest Review

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Published by: JimmyVielkind on Feb 19, 2013
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05/14/2014

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FIDUCIARY AND CONFLICT OF INTEREST
REVIEW OF THE NEW YORK STATE
COMMON RETIREMENT FUND

Final Report

Funston Advisory Services LLC

February 4, 2013

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New York State Common Retirement Fund
Fiduciary and Conflict of Interest Review

Table of Contents

Executive Summary ................................................................................................................................................................. 7
Background .............................................................................................................................................................................. 14

1. FIDUCIARY RESPONSIBILITIES AND FRAMEWORK FOR THE OPERATIONS AND DECISION
MAKING PROCESSES OF THE FUND ................................................................................................................................ 25
1.A. Overall Fiduciary Compliance Conclusion ............................................................................................. 26
1.B.-G. Investment Related Policies, Procedures and Practices................................................................... 26
2. ETHICAL, PROFESSIONAL, AND CONFLICT OF INTEREST STANDARDS ................................................. 31
2.A. Committees ......................................................................................................................................................... 32
2.B. Employee Training ........................................................................................................................................... 50
2.C. Investment Managers, Consultants and Advisors Conflicts of Interest ..................................... 53
2.D. Placement Agents or Intermediaries ........................................................................................................ 56
2.E. Process to Investigate Complaints ............................................................................................................ 57
3. OPERATIONAL TRANSPARENCY ............................................................................................................................. 59
3.A.1 Publication of Policies and Procedures ................................................................................................... 60
3.A.2 Level of Disclosure in the CAFR .................................................................................................................. 64
3.A.3 Third Party Contractual Requirements ................................................................................................... 66
3.A.4 Expense Recording and Transparency .................................................................................................... 67
4. EFFICIENCY AND EFFECTIVENESS OF MANAGEMENT ................................................................................. 71
4.A. Investment-Related Operations ................................................................................................................. 72
4.B. Use of External Managers and Consultants ........................................................................................... 80
4.C. Investment Accounting, Compliance, and Performance and Fund Analytics ....................... 118
4.D. Due Diligence Procedures .......................................................................................................................... 127
Appendix A - Official Compilation of Codes, Rules and Regulations of The State of New York, Title
11. Insurance Department .............................................................................................................................................. 136
Appendix B - Comptroller’s Compliance with the Official Compilation of Codes, Rules and
Regulations of The State of New York ........................................................................................................................ 146
Appendix C - Fiduciary and Conflict of Interest Review Tasks ........................................................................ 154
Appendix D - Glossary of Acronyms Used (in alphabetical order) ................................................................ 160

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