The New York State Department of Financial Services is nearing completion of a year-long operational review of the state's pension funds, according to department superintendent Benjamin Lawsky.

The department — which oversees the banking and insurance industries in New York — opened a similar review of public pension funds in New York City this week, Mr. Lawsky said Tuesday at a breakfast forum hosted by Crain's New York Business, a sister publication of Business Insurance.

Mr. Lawsky said the reviews are the first wave of the department's plans to ramp up its scrutiny of state and municipal pension funds in New York, which together hold in excess of $350 billion in assets.

“These are huge funds, and both taxpayers and (public) retirees deserve strong oversight,” Mr. Lawsky said. “Mistakes or mismanagement in our public pension funds can mean higher taxes for New York families and businesses, and a less secure retirement for public employees.”

While the pensions' day-to-day operations are overseen by their respective trustees, the state's financial services department is responsible for regulating those operations, Mr. Lawsky said.

“Previously the state's Insurance Department, one of our predecessor agencies, did somewhat limited reviews, and published those reviews quite rarely,” Mr. Lawsky said. “We're going to change that, and significantly step up the scrutiny.”

Mr. Lawsky said that news of Detroit's declaration of bankruptcy this month served as a stark reminder of the importance of fiscal responsibility and careful oversight when it comes to public retirement systems. However, he noted that the bankruptcy itself was not the impetus for his department's renewed interest in monitoring New York's pension funds.

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We started thinking about looking at these funds a lot more closely and with greater scrutiny more than a year ago,” Mr. Lawsky said. “I think Detroit underscores why this is an important thing to do, but it’s not like Detroit happened and then we decided that we needed to do this.”

Mr. Lawsky said his department’s initial audits of state pension funds would be published “shortly.” He added that the reviews were strictly operational in nature and were not conducted based on a suspicion of criminality.

“Any time you look at large, complex funds with billions of dollars in them, you’re going to find issues,” Mr. Lawsky said. “That’s not to say we’ve been finding any illegality anywhere, we’re just trying to make sure these funds are being run in a smart and sophisticated way.”