COVSF Benefit Payment for December 2017

The NYCERS Board had their October Regular Meeting last Thursday, October 12, 2017.

For over 50 minutes the trustees were treated to a song and dance by the IT director on the delayed two and half year old legacy upgrade project.

In contrast, over a two minute period the representative of the NYCERS Actuary, Sherry Chan, presented the trustees with Ms. Chan's FY-2017 financial and accounting report for the five city pension funds. Ms. Chan was not present. No questions were asked.

On a positive note, the NYCERS's closing balance increased from $55.49B to $61.32B during FY-2017. NYCERS was able to transfer $285.77M into the Correction Officers' Variable Supplements Fund (COVSF) in FY-2017. Of course, it would be very informative if the actuary would provide the details of the calculation of how she arrived at the $285.77M figure.

Now the big question is will there be a payment this December for the COVSF service retirees. Below is the COVSF payment history for the last five years. It looks very promising. Last year, 2016, there was no December payment.

COVSF History 2013-2016

Year	Open Balance	Interest Earned	"Skim"	Payments	Close Balance
FY-2013:	$35.925M	$0.038M	$0.000M	$0.000M	$35.963M
FY-2014:	$35.963M	$0.020M	$190.000M	$38.014M	$187.969M
FY-2015:	$187.969M	$0.010M	$30.012M	$78.285M	$139.706M
FY-2016	$139.706M	$0.184M	-$52.7240M	$82.149M	$5.017M
FY-2017	$5.017M	$0.300M	$285.924M	$2.624M	$288.165M
FY-2018	$288.165M

NYCERS Website - New User Interface

On September 14, 2017, the new NYCERS executive director had her first Board of Trustees meeting. The two main items on the agenda were a welcome to the new executive director and a presentation by the communications director of the new user interface to the NYCERS website, www.nycers.org. The website has been in place since 2003. NYCERS recently updated the use interface to the website.

The new interface does not add any new content to the website. In fact, the retirement calculator function now creates a server error for pensioners. There was no reason to deny pensioners access to the calculator. You may or may not find the new interface more helpful than the old one but there is no new info on the site. Instead of putting more content in the box NYCERS chose to only change the the box.

I hope the executive director picked up on this smoke. She did pick up on the smoke surrounding the IT training contracts.

Let's see how she handles appointing a new deputy executive director. The placement notification for her position made it clear that the number two position was up for grabs. Mazza has just taken a $14K pay cut and has been passed over for the second time for the executive director's job. She might not want the new executive director to succeed.

Denial of Tier 4 Pension Rights and the New Executive Director

Last January I wrote about NYCERS’s effort to force certain new correction officers, sanitation workers and DA investigators into Tier 6 who had existing Tier 4 NYCERS memberships.

Based on current inquiries for help from such members NYCERS is continuing to violate these members’ constitutional rights.

I am absolutely certain that neither the police nor fire pension funds are following this illegal procedure.

On Tuesday, September 5th, the new executive director will start working at NYCERS. I assume she will join the NYCERS pension system. If she does, NYCERS will initially enroll her as a Tier 6 member. She also has an active Tier 4 membership with NYSLERS. She has the right to transfer that membership to NYCERS, if she chooses to do so.

If she does choose to to transfer her Tier 4 state membership, it will be very interesting to see whether NYCERS correctly switches her tier status back to Tier 4. NYCERS has provided no legal rational for its illegal actions in forcing existing Tier 4 members into Tier 6.

I wonder whether the NYCERS Trustees informed the new executive director of this issue?

Notes to the New Executive Director

With the new executive director starting after Labor Day, I thought I would share a few ideas from a former executive director.

1. Unlike NYSLERS, NYCERS has an independent administrative budget. This gives you tremendous resources to effectively run NYCERS. I recommend that you carefully read the enabling legislation which created the budgeting authority. See Chapter 593 of the Laws of 1996.

2. Even in the context of the state’s civil service laws, you have a great deal of flexibility in dealing with executive personnel decisions. There is a clear need to make radical changes in senior staff at NYCERS.

3. The budgeting law also provides you (via annual Board approval) with broad authority to enter directly into contracts for goods and services. You will quickly realize how helpful this is but it is a very sharp knife. Be careful.

4. The Board of Trustees is a direct descendent of the old Board of Estimate with three major unions thrown into the mix. It escaped the Supreme Court one person – one vote decision but not the permanent war between the Mayor and the Comptroller.

5. I recommend that you read my postings to get a detailed view of the organization that you are taking control of. You may not agree with everything I write but you will get concrete statements of facts. You will also find that the previous executive director left no paper trail of her decisions and actions while she was in charge of the agency.

6. The NYCERS web site needs a significant expansion of its content both with respect to general benefit information and detailed member/retiree historical data that NYCERS has in its massive computer files.

7. Current production reports are a sham and service levels are atrocious given the amount of money appropriated in the agency’s budget.

8. While the NYC Law Department is NYCERS’s statutory legal counsel, your personal expertise with NY pension law puts you in a strong position to insure members and retirees are treated correctly. In the last twelve years, NYCERS executive staff has taken a great deal of incorrect and mean spirited actions against members and retirees. I have written extensively about this in my NYCERS blog.

9. Personal plug: I run a successful pension and IT consulting firm and would be very interested in providing services to my old agency.

The New Executive Director

On Monday the Board of Trustees appointed a permanent executive director. Her name is Melanie Whinnery. She will start on September 5th. She currently works at NYSLERS

I am so very glad that the Trustees chose to give the NYCERS staff a break from the mayhem of the last 12 years. Lets hope this was a good decision.

Somethings Never Change: the Actuary and the Assumed Interest Rate

In September, 2015 I wrote a posting about the new NYCERS actuay, Sherry Chan, who was appointed in May, 2015. She is currently being paid an annual salary of $279,000.

Specifically I wrote:

The assumed interest rate is the key component of the annual pension costs that the city and the other participating employers must pay to the pension funds each year. It will be interesting to see where Ms. Chan stands on the 7% net of fees rate. She will be required to make a recommendation this winter for a new five year rate effective July, 1, 2016 and Albany will have to enact enabling legislation by June 30, 2016.

I suspect she will punt and ask for a one year extension of the old rate. North did this all the time. It is a bad fiscal policy and contributes to the under-funding of the pension funds.

Sure enough on June 30, 2016, the governor signed Chapter 61 of the Laws of 2016 which was a one year extension of the 7% (net of fees) interest rate. Ms. Chan stated that she was to busy during her first year to recommend a new five year rate.

This year, on June 29, 2017, the governor signed Chapter 71 of the Laws of 2017 which was again a one year extension of the 7% (net of fees) interest rate. This time Ms Chan stated that she chose not to recommend a five year interest rate because she was waiting for the completion of the two year actuarial audit.

As a point of reference the previous two year actuarial audit was completed in 2016.

I could yell and scream but, what the hell, nothing is going to change.

DFS and the Elusive Pension Audits

It is June 26, 2017, a sunny June day. It is also two years ago that the NYS Department of Financial Services announced a major audit of the seven major NYS retirement systems.

There are still no audits reports from DFS.

For the record, DFS is scared to death to publish any reports on the seven retirement systems. DFS knows how bad the situation is. They can either report the facts and create sheer terror, or they can fake it and be on record for hiding the facts.

Just stop billing the retirement systems for your bullshit audits and save the taxpayers some money.