Did the Trustees Really Appoint a New Executive Director - There is No Public Record?

The previous NYCERS executive director retired last May (2025) and in response the NYCERS trustees appointed the current deputy executive director, Liz Reyes, as acting executive executive director.

Since then, the trustees have been persuing a hiring process.

By statute, the NYCERS Trustees are authorized to appoint the agency's executive director. That requires them to adopt an appointing resolution in public session with a recorded vote so that the public knows who the executive director is.

Based on a copy of the alleged appointing resolution, R-6 dated 12/17/2025, the trustees appointed Reyes as the new executive director with a salary of $293,038 at the Decmember 17, 2025 Investment Board Meeting.

This was the last NYCERS board meeting with the previous mayor's rep and the previous comptroller sitting on the Board of Trustees. I seriously thought that the trustees would wait for the new mayor and comptroller to be sworn in before making the appointment.

Interestingly, the resolution was electronically signed by the Mayor Adam's rep on the Board, Bryan Berge - the Chairpeson, as opposed to the standard signature of the executive director.

Also interesting, is that there was a Regular Board meeting on December 11, 2025 which would have been a more appropriate setting for the appointment resolution.

The Problem

The reason I am writting about this issue is that there is no trace of the resloution being adopted during the investment board meeting.

You can ckeck the closing video of the investment mmeting. You can hear the acting executive director make reference to the five investment resolutions that were adopted during the executive session so that there was a piblic record of the resolutions.

This was done because there is no public record of executive sessions of the NYCERS Board of Trustees and resolutions must have some public notice to be valid.

The meeting was then adjorned with no reference to a sixth resolution. That means there is no public notice of the appointment and Reyes may still be only the acting executive director.

There is, however, a stray comment after the meeting ended - "Did you need to add that item? Yeah. So.". There is no other activity after that comment. We have no idea what that item was.

Of course, the trustees can address this issue at the next Board meeting with the new Mayor's rep and the new Comptroller.

In conjuction with this appointment there is a major cloud hanging over Reyes relating to the legacy (LRP) project. The new Board members may have some questions about that project.

$634.1 Million in Investment Fees for FY-205 - Growing Risk Level in NYCERS Investments and Runaway Fees.

Runaway Investments fees

In FY-2000 NYCERS paid $37.4 million in investment fees for an asset base of $42.8 billion.

In FY-2023 NYCERS paid $489.9 million in investment fees for an asset base of $82.4 billion.

In FY-2025 NYCERS paid $634.1 million in investment fees for an asset base of $94.3 billion.

The numbers speak for themselves. There is no benefit to these radically increased fees. Clearly, two and a quarter of the $37.4 million in fees from FY2000 could cover the $94.3 billion in assets for FY-2025. But the current trustees have no idea what was going on in 2000.

This is a big part of the income inequality in America. This story is not just about NYCERS but every public pension plan in America.

Increasing Investment Risk

In a prior post from January 2020, I outlined a new accounting reporting requirement for government pension plans (GASB 72) mandating that plans report a breakdown of the reliability of the reported value of the plan's investments. The assets are broken down into 3 levels as listed below:

• Level-1 assets - open market - very liquid
• Level-2 assets - open market - not as liquid
• Level- 3 and NAV assets - no open market - not liquid

In addition to these crazy fees noted above, the risky Level-3 assets at NYCERS have grown steadily since 2015. On top of this growth in risky assets, in 2023 there was a law passed in Albany to raise the limit (from 25% to 35%) on the amount of Level 3 and NAV assets in a NYS public pension plan.

In the table below you will see the growth for Level-3 and NAV class assets at NYCERS.

Note: As of FY-2023 NYCERS is relabeling alternative investments as net asset value items rather than Level 3 as a "practical expedient". This is a PR sleight of hand. Nobody wants to be called Level-3. "NAV" is a lot more vague. $19.8 billion (25% of the portfolio) for Level-3 and NAV assets is an obvious red flag for the risk level of the portfolio.

You have to be skeptical about the quoted $22.7 billion for NAV assets and consider a possible 50% reduction for this class.

Ranking of NYCERS Assets via GASB 72

Fiscal Year	Level-1 Assets (in thousands)	Level-2 Assets	Level-3 Assets	Assets at Net Asset Value	Total
FY-2014	$27,028,432	$17,437,139	$10,642,729	$0	$55,108,300
FY-2015	$27,707,076	$17,175,757	$10,796,968	$0	$55,679,801
FY-2016	$27,330,534	$15,924,399	$10,377,791	$1,123,861	$54,756,585
FY-2017	$32,312,375	$17,461,428	$10,914,801	$95,987	$60,784,591
FY-2018	$31,219,885	$23,282,843	$10,880,803	$66,675	$65,450,206
FY-2019	$34,128,310	$22,782,825	$11,534,369	$6,979	$68,452,483
FY-2020	$33,647,567	$24,941,479	$11,856,921	$3,735	$70,449,703
FY-2021	$42,162,979	$30,981,818	$14,845,548	$1,240	$88,091,585
FY-2022	$32,892,068	$26,386,373	$18,726,172	$1,129	$78,005,742
FY-2023	$35,986,966	$25,235,457	$461,156	$19,845,541	$81,529.120
FY-2024	$35,349,996	$30,145,235	$476,857	$21,630,394	$87,602,482
FY-2025	$39,557,691	$30,719,472	$460,754	$22,669,399	$93,407,315

Investment Expenses for the Assets by Quality for FY-2025

In FY-2025 NYCERS paid the following investment management fees for the different levels:

1. $60.5M for Level 1 assets (FY-2023 fees = $54.7M).
2. $32.9M for Level 2 assets (FY-2023 fees = $25.0M)
3. $464.8M for Level 3 and NAV assets (FY-2023 fees = $375.0M)

One domestic equity manager, Blackrock, handles $14.5 billion in assets with $259,713 in fees. Yes, less than $260,000 dollars for FY-2025.

Again, the numbers speak for themselves. The trustees are being rolled big time - everywhere.

How Taxes Crush the Poor

The federal marginal tax rates have always been biased in favor of rich people. Why the rest of us put up with this inequity, boggles the mind. Poor people need to start chopping rich people down to size

If you click on this link, chart, you will see a chart with proportional marginal tax rates. You can download it and make your own changes if you want.

I know this proposal is a pipe dream but sometimes you just have to point out the truth in spite of the odds.

The Structure of the Chart

The chart lists annual taxable earnings ranges starting with $0 to $10,000. Each range is incremented by $10,000 up to $500,000. Then the ranges are incremented by $500,000 with the last range running from $5,500,000 to $10 billion. The earnings ranges should be based adjusted gross income but for comparison purposes I am using taxable earnings.

The pattern for the change in the marginal rates is a .75% increase for every increase of $10,000 in income up to $500,000.

The first range of $0 to $10,000 has a 0% tax rate.

Above $500,000 the rate increase is 5% for every $500,000 increase in income and for the last open-ended earnings range up to $10 billion.

The Left Side of the Chart and the Right Side

If you look at the left side of the chart, you will see the proposed tax rates and the max taxes for the top of each earnings range.

If you look at the right side of the chart, you will see the current tax rates and the max taxes for the top of each earnings range.

For example, the proposed rate for the $140,000-$150,000 range is 10.5% with a max tax of $7,875 on $150,000.

The current tax rate is 24% with a max tax of $28,800 on $150,000.

After tax income on the proposed marginal tax rates would be $142,125, while on the current marginal tax rates are $121,200.

The Upper Ranges

Even with this proportional approach, this scheme gives rich people a break. There is, however, much greater fairness with this method.

You will notice that all income ranges up to the $490,000-$500,000 range generate lower taxes than the current marginal rates but all the ranges above $5000,000 (the 1%) are subject to higher taxes.

It goes without saying that the 1% will fight to death to kill these types of marginal rates. It is up to the 99% to make them pay.

The 1% benefit enormously from living in America and they should pay for that benefit.

Jan-2026: Update on the Legacy Replacement Project (LRP) Fiasco - Has the Project Been Cancelled?

NYCERS just sent me a copy of the FY-2025 Schedule of Paymemts to Consultants which appears to be a missing page from the ACFR report for FY-2025.

Significantly, Accenture was not on the list for payment.

The ommission of Accenture, who has the LRP contract, means that NYCERS did not pay Accenture anything for the entire year (July 2024 to June 2025). Accenture was paid $17.0 million in FY-2024. This, then, raises the question whether Accenture is still working on the contract, is there a dispute about the work, or is the contract dead.

As of December 2025 there is no reported resolution to the problems with the LRP project and there is still no clear description of the problems with contract and project.

As reference, this is what NYCERS said in the FY-2024 financial report (see full quotes below):

In parallel to a Phase 2.0 delivery, the Systems Integrator and NYCERS are working on a re-baseline plan for the remaining phases, which will be discussed during the February 2025 Board of Trustees Meeting.

And this what NYCERS said in the FY-2025 financial report:

NYCERS and the systems integrator are actively collaborating on a comprehensive re-baseline plan to complete the project , with an updated schedule and projrct details to be presented to the NYCERS Board of Trustees by April 2026.

It is time for the trustees to publicly state what has happened to the LRP project. Is there a DOI investigation? The new executive director has been directly responsible for the LRP project since its inception in 2016. Is there any accountability?

Seemingly in reaction to the stop payment to Accenture, NYCERS increased payment to Gartner from $2.0 million to $3.9 million for technical advice. In addition, the cost for "software, licences, and support" increased from $10.8 million to $16.0 million.

The Accenture Contract

In the Febraury, 2021, NYCERS awarded the LRP contract to Accenture at a cost of $85 million for 5 years. That is roughly an annual charge of $17 million. Work started in June 2021 and was scheduled to finish in September 2026. Best guess now for a completion date is the end of 2030.

Based on the updated ACFR data NYCERS has paid Accenture fot the LRP contract:

FY-2025	$0
FY-2024	$17.9 million
FY-2023	$817,492
FY-2022	$9.8 million
FY-2021	$926,341

Quotes from NYCERS FY-2024 and FY-2025 Financial Statements

You can see from the official comments from NYCERS concerning the LRP project that there is no mention of the fact that payemnts have been stopped to Accenture.

2024

The Legacy Replacement Project (LRP) is a complex, multi-year initiative to modernize NYCERS’ business processes and related technologies. The principal objective of the LRP is to replace NYCERS’ legacy production application with a new pension administration system. This new pension administration system will transform the way NYCERS does business and interacts with its members, retirees, employers, and other City agencies. This will be accomplished using flexible up-to-date technologies that will provide ongoing value into the future.

LRP began in June 2021, with a plan to complete the transformation over five years/five phases, with a target completion of September 2026.

Phase 1 was launched in January 2023, introducing foundational functionality that future phases will build upon.

In the midst of Phase 2 delivery, a range of legacy system changes surfaced that impacted the overall timeline. The Systems Integrator proposed to deliver a subset of Phase 2, called Phase 2.0, as this functionality did not rely on those legacy system changes, and we are currently on track for a January 2025 launch.

In parallel to a Phase 2.0 delivery, the Systems Integrator and NYCERS are working on a re-baseline plan for the remaining phases, which will be discussed during the February 2025 Board of Trustees Meeting.

2025

The Legacy Replacement Project (LRP) is NYCERS' multi-year transformation initiative to modernize NYCERS’ core business processes and replace NYCERS' existing legacy pension administration system with a secure, adaptable, and future ready technology platform. This modernization will significantly enhance how NYCERS conducts business and delivers services to members, retirees, employers, and partner City agencies.

Initiated in June 2021 as a five-phase program targeted for completion in September 2026, the project continues to advance.

Phase 1 successfully was launched in January 2023, establishing critical foundational capabilities for future phases.

During Phase 2 development, legacy system dependencies were identified that required timeline adjustments.

In response, the systems integrator and NYCERS delivered a subset of functionality referred to as Phase 2.0 in January 2025, allowing progress to continue, while collaborating on a schedule for the remaining functionality continued.

NYCERS and the systems integrator are actively collaborating on a comprehensive re-baseline plan to complete the project , with an updated schedule and projrct details to be presented to the NYCERS Board of Trustees by April 2026.

How NYCERS Spent Its LRP Money in FY-2025

Considering the massive hang up surrounding the Legacy Replacement Project (LRP), we should take a careful look at what NYCERS is spending on administrative operations. They were $129 million in FY-2025.

God forbid we look at the investment expenses, $634 million in FY-2025.

A year ago at the December 2024 Board meeting, the executive director reported that because of delays in the LRP project, the payments for the project were $24 million lower than budgeted. The executive director retired in May 2025.

It then became clear from the NYCERS FY-2024 Annual Comprehensive Finacial Report (ACFR, released at the end of December) that at some time in FY-2024, the Accenture LRP contract hit a major obstacle and that a solution would be presented to the Board at the February 2025 Board meeting.

At the Febuary 2025 Board meeting NYCERS staff was supposed to present a new strategy with corrective details. What they presented was a four year delay with a promise to present the operational details in June 2025. As of December 2025, there are no details.

This year at the December 2025 Board meeting, the interim executive director, the mastermind of the LRP fiasco, reported that because of a pause in the LRP project, admin expenses for FY-2025 came in at $39.7 million under the amount budgeted for FY-2025 ($128M instead of $168M). Wasn't that the message last year? Of course, no questions from the trustees about the $39.7 million.

The Accenture Contract

In the Febraury, 2021, NYCERS awarded the LRP contract to Accenture at a cost of $85 million for 5 years. That is roughly an annual charge of $17 million. Work started in June 2021 and was scheduled to finish in September 2026. Best guess now for a completion date is the end of 2030.

Based on the ACFR reports NYCERS has paid Accenture:

FY-2025	not reported in ACFR
FY-2024	$17.9 million
FY-2023	$817,492
FY-2022	$9.8 million
FY-2021	$926,341

We can see possible probelms even as early as FY-2023.

From the chart below we can see consulting costs going from $11 million in FY-2020 to $31 million in FY-2025. Because of the holdup with LRP this amount dropped from $42 million in FY-2024 to $31 million this year but there still is a lot money being paid to someone. NYCERS failed to report contracts for FY-2025.

In addition, software costs have climbed to $23 million in FY-2025 from $13 million in FY-2020. There is no pause in spending here. There is also no public reporting of the details of these costs.

Runaway Payroll Costs

In the midst of this chaos, payroll costs have gone from $46 million in FY-2020 to $66 million in FY-2025. That is 44% increase over five years.

There was a serious service problem with processing retirement application which NYCERS staff has supposedly gotten under control. In FY-2024 the trustees expanded personnel resources to solve this problem. In the FY-2026 budget, the trustees have continued to hold the full-time head count at 501 but have increased personnel costd from $70.2 million to $73.6 million, an almost 5% increase.

History of Admin Expenses

The chart below is a breakdown of all NYCERS administrative expenses from 2017 to 2025. The information comes from NYCERS Annual Comprehensive Financial Report ACFR).

NYCERS Admin Expenses

Fiscal Year	Budgeted F/T Head Count	Personnel Expenses	Contracts & Consultants	Phone, Mail, & Printing	Rentals	Software, Hardware, Support, Supplies, & Maintenance	Total
FY-2025	501	$66,035,631	$31,321,363	$1,145,708	$7,247,706	$23,133,146	$128,883,554
FY-2024	501	$60,156,204	$42,434,468	$1,236,809	$9,257,263	$17,189,819	$130,274,563
FY-2023	485	$57,736,915	$19,910,959	$1,037,015	$9,282,322	$17,825,949	$105,793,160
FY-2022	483	$52,303,943	$27,418,528	$1,029,424	$9,329,701	$14,906,397	$104,987,993
FY-2021	474	$48,693,043	$14,058,975	$1,290,546	$6,617,040	$16,753,334	$87,412,938
FY-2020	438	$45,736,806	$11,337,750	$1,173,896	$6,870,614	$12,548,240	$77,667,306
FY-2019	428	$43,717,712	$15,884,418	$1,114,263	$6,637,059	$14,719,873	$82,073,325
FY-2018	415	$40,444,145	$4,310,427	$1,072,077	$6,348,888	$7,513,233	$59,688,770
FY-2017	401	$39,505,894	$3,829,758	$1,561,282	$5,909,352	$8,864,342	$59,670,628

Dec-2025 Update on the Legacy Replacement Project Fiasco - The Trustees have a Fiduciary Responsibility to Investigate

As of the NYCERS Board of Trustees meeting on December 11, 2025, the acting executive director again has no update on the Legacy Replacement Project.

"The project is in red status - there no fix to the scope and schedule of the $84 million contract - no questions asked"

It is now one year since this the project has stalled.

The New Executive Director???

In the midst of this chaos, the trustees chose to appoint Liz Reyes, the mastemind of the LRP fiasco, as the new executive director of NYCERS. I wonder if the new mayor is aware of this lunacy?

I have good reason to suspect that the trustees are very aware of the LRP mess, especially because that there have been no questions on the record about this issue and a shut down from the chair when a stray question was asked.

Then why did the trustees appoint Reyes as the new executive director? It maybe that they couldn't get anyone else to take on the problems. You can just image what a new person would have to do to straighten out the LRP mess. Who on staff could he/she trust? Who would he/she have to fire? Are any trustees implicated?

NYCERS FY-2025 Financial Statement

On a related item, NYCERS just released its FY-2025 financial report. You can see from the two quotes below (FY-2024 and FY-2025) the PR spin NYCERS is putting on this mess. I get the creppy feeling that they were AI generated.

2024

The Legacy Replacement Project (LRP) is a complex, multi-year initiative to modernize NYCERS’ business processes and related technologies. The principal objective of the LRP is to replace NYCERS’ legacy production application with a new pension administration system. This new pension administration system will transform the way NYCERS does business and interacts with its members, retirees, employers, and other City agencies. This will be accomplished using flexible up-to-date technologies that will provide ongoing value into the future.

LRP began in June 2021, with a plan to complete the transformation over five years/five phases, with a target completion of September 2026.

Phase 1 was launched in January 2023, introducing foundational functionality that future phases will build upon.

In the midst of Phase 2 delivery, a range of legacy system changes surfaced that impacted the overall timeline. The Systems Integrator proposed to deliver a subset of Phase 2, called Phase 2.0, as this functionality did not rely on those legacy system changes, and we are currently on track for a January 2025 launch.

In parallel to a Phase 2.0 delivery, the Systems Integrator and NYCERS are working on a re-baseline plan for the remaining phases, which will be discussed during the February 2025 Board of Trustees Meeting.

2025

The Legacy Replacement Project (LRP) is NYCERS' multi-year transformation initiative to modernize NYCERS’ core business processes and replace NYCERS' existing legacy pension administration system with a secure, adaptable, and future ready technology platform. This modernization will significantly enhance how NYCERS conducts business and delivers services to members, retirees, employers, and partner City agencies.

Initiated in June 2021 as a five-phase program targeted for completion in September 2026, the project continues to advance.

Phase 1 successfully was launched in January 2023, establishing critical foundational capabilities for future phases.

During Phase 2 development, legacy system dependencies were identified that required timeline adjustments.

In response, the systems integrator and NYCERS delivered a subset of functionality referred to as Phase 2.0 in January 2025, allowing progress to continue, while collaborating on a schedule for the remaining functionality continued.

NYCERS and the systems integrator are actively collaborating on a comprehensive re-baseline plan to complete the project , with an updated schedule and projrct details to be presented to the NYCERS Board of Trustees by April 2026.

Hiding Data

There was a strange omission in this year's report. In particular a schedule of payments to consultants was missing from the report. This schedule has been in the annual reports since 1986, the first year that the NYCERS report was published.

I suspect that NYCERS became aware that I was able to track the runaway spending through this schedule.

Below is an image of the schedule from FY-2024. You can click on the image and then open it another tab to get a bigger display of the image.

Last year's (2024) total cost for consulatnts was $40.4 million. This year's (2025) total is $29.0 million. This refelects the hold on the LRP contract.

The cost, however, for "software, licences, and support" has increased from $10.8 million to $16.0 million from 2024 to 2025.

Legacy Replacement Project - Still Adrift

As of the NYCERS Board of Trustees meeting on October 9, 2025, the acting executive director still has no update on the Legacy Replacement Project (LRP) that is four years behind schedule.

Update: As of the NYCERS Board of Trustees meeting on November 13, 2025, the acting executive director again has no update on the Legacy Replacement Project.

On a connected topic, the Trustees still have not appointed a new executive director to replace the former director who retired in May. The agency has also suspended filling a large number of open management positions.

With the election of a new mayor and comptroller, let us hope that the trustees will clean house and appoint a competent person to straighten out the agency.