Every June the NYCERS actuary presents to the trustees his estimate of what the pension costs will be for the next year. The total bill for FY-2012 is $2.587B. The city's share of that cost is $1.403B. The rest is charged to other participating employers.
As part of the $2.587B amount, there are two non-benefit items. They are investment expenses and administrative expenses. The charge for investment expenses is $204M and for administrative expenses, it is $55M.
The $204M figure grabbed my attention when I saw it. I have previously complained about obscene growth in investment fees but there is a real kick to the actuary's $204M charge.
I have listed below the investment fee charges since 2000. I can not believe that the trustees think these increases are rationale.
- $27.2 (2000)
- $38.5 (2001)
- $40.0 (2002)
- $40.6 (2003)
- $31.6 (2004)
- $46.4 (2005)
- $00.0 (2006)
- $53.8 (2007)
- $80.9 (2008)
- $114.5 (2009)
- $134.5 (2010)
- $161.1 (2011)
- $204.4 (2012)
In 2006, the city had the law changed so that expenses were paid two years after the fact rather than one year, thus producing a payment holiday.
On a smaller scale administrative expenses have gone up 40% since 2005, from $35.3M to $55.1M. Does anyone think that service at NYCERS has increased 40% over that time period. It sure wasn't the completion of the disaster recovery site.
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