Mayor Bloomberg and the NYCERS Trustees

The structure of the NYCERS Board of Trustees is defined by Section 13-103 of the NYC Admin Code.

The Trustees are:

1. the Mayor's representative who is the chairperson,
2. the Comptroller,
3. the Public Advocate,
4. the five Borough Presidents, and
5. the chief executive officer of each of the three employee organizations who represent the largest number of employees who are members of NYCERS.

Up until 2009 there was no problem with this composition of the Board. But when Martha Stark was shunted over to CUNY from Finance, some brilliant staffer in City Hall decided to make the mayor the chairperson of the Board.

In his most recent written designation of his representative the mayor uses the following wording:

Prusuant to New York City Administrative Code Section 13-103, I hereby designate Ms. Carolyn Wolpert, as my representative to exercise the discretionary powers and duties granted to me as Chairperson of the Board of Trustees of the New York City Employees' Retirement System Pension Fund and related variable supplement funds. Janice Emery, Elizabeth Botwin, David Frankel, John Grathwol, Omair Hassan, Raymond Sarola and Justin Holt, in that order, will serve as my alternate representatives in Ms. Wolpert's absence.

Just for contrast here are the exact words from Section 13-103:

1. A representative of the mayor who shall be appointed by the mayor and who shall be entitled to cast one vote. The mayor, by a written authorization filed with the board, may designate one or more members of his or her office to act in the place of such representative, in the event of his or her absence. Such representative or designee acting in his or her place shall be chairperson of the board.

For the record the world won't come to an end because of this botched designation.

But what it does show is a flawed attitude towards NYCERS by City Hall. First of all the mayor has no discretionary powers and duties granted to him as the Chairperson of the NYCERS Board. He is not the Chairperson of the NYCERS Board. He is not even a trustee of the NYCERS Board. In fact I think it is correct to say that the trustees do not have discretionary powers but are strictly bound by statutory and fiduciary obligations.

Why can't the mayor just designate a representative to the NYCERS Board and leave the misplaced sense of power at home. He should focus on the quality of his representative to the NYCERS Board. Some of his past choices have been very questionable.

Yesterday the mayor presented his FY-2014 budget. It had an $8,076(MM) pension cost for the five city actuarial pension funds.

Part of that cost was $357(MM) for investment expenses incurred in FY-2012 plus two years of 7% interest charges. You can reference the investment expenses in the FY-2012 CAFR on page 162 and while you're there look at pages 115 and 121. The five funds earned a miserable 1.4% on their assets in FY-2012 but the investment managers were well paid.

I wonder whether the mayor would be satisfied paying that kind of money for that kind of result on his assets?