Administrative Expenses at NYCERS

I just read a October 12, 2012 NY Post article concerning administrative expenses at NYCERS. The Board refused the mayor's offer of $350,000 to pay for a consultant to come up with ways to cut the $120M/yr. administrative costs for the city's five pension funds.

This is a wild story. By statute NYCERS has to report all expenditures to OMB. (see S.13-103.g below) OMB is in the business of doing management audits of all city agencies. They don’t need to hire an outside consultant. The mayor just has to ask OMB to do the analysis.

The mayor can also instruct his representative on the Board to vote against the budget each year, if he is not happy with the way the executive director is running the agency (i.e. the LIC site ).

FYI: The Board had an extensive management audit done in 1996-1998. The trustees might try reading it.

In addition, by statute (S.13-103.g) the Comptroller is supposed to audit all NYCERS expenditures and is allowed to make recommendations, if he wishes to. Unfortunately, progress on the Comptroller’s heralded budget disclosure site has stalled.

NYCERS’s administrative budget (excluding loan operations:paid by members) has grown steadily in recent years.

1. FY-2013=$43.838M (plus $7.532M fringe) (staff:380 full time & 25 par time)
2. FY-2012=$44.538M (plus $6.603M fringe)
3. FY-2011=$44.539M (plus $6.006M fringe)
4. FY-2010=$43.825M (plus $5.362M fringe)
5. FY-2009=$43,398M (plus $4.879M fringe)
6. FY-2008=$41.908M (plus $4.799M fringe)
7. FY-2007=$37.033M (plus $4.375M fringe)
8. FY-2006=$34.939M (plus $4.076M fringe)
9. FY-2005=$34.589M (plus $3.887M fringe) (staff:342 full time & 13 part time)

I was quite amused by the closing text from the article:

“The vote goes against all logic and is a lost opportunity to improve operations,” said Finance Commissioner David Frankel.

Why is Frankel commenting on a NYCERS Board of Trustees vote. He has nothing to do with NYCERS. Considering the ongoing mess at Finance he should focus on his own responsibilities.

Section 13-103.g of the NYC Admin Code dealing with the NYCERS adminitrative budget. g. All expenditures of the retirement system shall be subject to audit by the comptroller, who may make recommendations, including but not limited to, procedures designed to improve accounting and expenditure control. All expenditures of the retirement system shall be reported to the mayor's office of management and budget and the budgetary office of all participating employers.