Monday, February 13, 2012

New York State Department of Financial Services -- Failure to Supervise

Quoted below are Section 314 of the NYS Insurance Law and Section 13-183 of NYC Administrative Code which authorizes the NYS Department of Insurance to supervise NYCERS.

§ 314. Public retirement and pension systems.

(a) In this section, "system" means an actuarily funded public retirement or pension system of the state of New York or of a municipality thereof.

(b) Notwithstanding any other provision of law to the contrary, the superintendent shall have, in addition to any other powers conferred upon him by law, the following authority with respect to any system:

(1) to require the administrative head or trustees of a system as may be appropriate to file an annual report pursuant to the provisions of section three hundred seven of this article in such form and containing such matters as the superintendent shall prescribe, and to respond in such form as the superintendent may require to any inquiry in relation to transactions or condition of the system or any matter connected therewith pursuant to the provisions of section three hundred eight of this article;

(2) to promulgate and amend from time to time, after consultation with the administrative heads of systems and after a public hearing, standards with respect to actuarial assumptions, accounting practices, administrative efficiency, discharge of fiduciary responsibilities, investment policies and financial soundness; and

(3) to make an examination into the affairs of every system, including compliance with the standards established pursuant to paragraph two hereof, at least once in every five years in accordance with the provisions of sections three hundred ten, three hundred eleven and three hundred twelve of this article and to recover the expenses of such examination from such system in accordance with the provisions of section three hundred thirteen of this article. A copy of each report on examination as filed for public inspection shall be forwarded to the governor, state comptroller and legislature and, in the case of systems of the city of New York, to the mayor, city comptroller and president of the city council.

§ 13-183 State supervision. The retirement system shall be subject to the supervision of the department of insurance in accordance with the provisions of sections three hundred seven, three hundred eight, three hundred nine, three hundred ten, three hundred eleven and three hundred twelve of the insurance law, so far as the same are applicable thereto, and are not inconsistent with the provisions of this chapter.

According to statute the NYS Insurance Department has conducted these audits every five years for as long as I worked at NYCERS and before. I began working at NYCERS in 1973. The last meaningful examination, however, was published in March, 2001. This examination started on October 4, 2000.

There was later examination published on June 25, 2009 during the Patterson administration. This examination was started on February 4, 2004 during the Pataki administration. In 2004 during the course of this examination there were serious confrontations between the Insurance Department and the NYC Comptroller's Office over investment policies at NYCERS.

When the NYS Insurance Department finally published this report, years later, on June 25, 2009, it had, besides being years late, also truncated the exam dropping the last two years of the statutory five year period. The Insurance Department made no acknowledgement of omission and gave no reason for it. Since the examination report was published seven years after the covered period, the report was of little value.

The NYS Insurance Department began a recent examination in early 2010. Based on the statutory five year exam period this examination should cover FY-2005 to FY-2009 and hopefully pick up the two lost years, 2003-2004, dropped from the last published examination. The Insurance Department has not yet published the report of the most recent examination. At best, the Insurance Department is almost three years late with this report.

On October 3, 2011 the NYS Insurance Department was reorganized into the new NYS Department of Financial Services. In November I requested a copy of the report of this 2010 examination from this new department. I was told that the report had not yet been published and there was no expected date for the release of the report.

It is clear that NYS Department of Financial Services has failed in its statutory obligation to properly audit NYCERS since 1999. In fact, it has failed to audit all seven of the NYS public pension plans as well as the numerous variable supplement plans associated with the NYC pension funds.

5 comments:

Dave L said...

Not audited the pension plans and various VSF's , THAT IS CRIMINAL

Lynn Errara said...

Because they didn't and it was their mistake I lost my pension except for 4 dollars a month

Lynn Errara said...

I got hurt on the job as anyc correction officer. My Union COBA directed me to fill out workers comp papers then they forced me to retire. I planned my life according to the pay I was receiving, I had a child, bought a home etc. Now it is time for my daughter to attend college and because NYCERS was asleep all those years they made a mistake and admit it. They brought my pension down to 4 dollars. Now I am losing my home cant hardly afford groceries or clothing never mind sending my daughter to college. My disability has worsened through the years, went through divorce and two custody battles and had to go bankrupt. Because of there laziness not doing the paper work they were suppose to do I should have received the higher disability pension without the workers comp and I would not be in the destitute stage I am in

Lynn Errara said...

Mr. John Murphy if you can please get in touch with me I would appreciate it. I have written a letter to the controllers office about my situation and they forwarded my info to nycers ans said if nycers did not get in touch with me to call a woman at controllers office. I called controllers office left a message and she never returned my call. A few weeks later I get a letter from NYCERS telling me if My Workers Comp ever discontinues to let them Know and they will review my case. How can I tell Workers Comp to stop paying me if its not enough to live on in this economy the way it is. if You can give me some advice I would greatly appreciate it.

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