In his campaign to become the comptroller of New York, Scott Stringer said he would bring down USD 370 million annual fees paid by the city's five pension funds to their managers and consultants. He won that campaign and is set to begin his job on January 1, but bringing down those fees may prove to be a challenge. a Bloomberg report said.

According to Bloomberg's report, the fees had increased to USD 472.5 million in the fiscal year ending June 30. Bloomberg obtained the figure from the Comprehensive Annual Financial Report of the Comptroller for the said period prepared by incumbent Comptroller John C. Liu. Bloomberg reported that the 28% increase was more than two times the return on the retirement system's assets amounting to USD 137.4 billion in the same period. Investment expenses for the city's pension funds had also increased by USD 280 million in the past seven years.

In a statement, the 53-year old Stringer said, "I'm going to take a hard look at all of our fees. We need to limit costs, ensure payments are commensurate with performance and leverage our size and relationships with other pension funds to negotiate lower fees."

The increasing cost showcased the difficulties that officials all over the US face in bringing down the management fees of pension funds and bolstering returns. Data gathered by Bloomberg showed that the gap between what is promised to retirees and the assets available to fund them has increased to USD 1 trillion. For New York, the deficit stands at USD 72 billion.

Retirement systems have invested in costlier and riskier forms of investments like private equity, real estate and hedge funds to increase funding and hit returns of anywhere from 7% to 8% a year, based on data gathered by Bloomberg. Managers of those funds usually charge 2% of the assets they manage in addition to the 20% they get from the profits, Bloomberg reported.