Why Is NYCERS Spending over Twice as Much As Other Pension Plans?

CEM Cost Study of NYCERS Pension Administration

Admin Cost Study From the Report

At the September 2026 NYCERS Board Meeting there was a presentation by CEM analyzing the NYCERS's administrative costs for FY-2025. See the report.

CEM Benchmarking is a global data analytics and independent benchmarking firm that compares the costs, performance, and operations of institutional investors, pension funds, sovereign wealth funds, endowments, and foundations.

In particular specializing in administration benchmarking:

• Measures the cost and quality of pension administration (front, middle, and back-office operations, call centers, and digital services)

In recent years NYCERS has contracted with CEM to do annual cost analysis on NYCERS expenses.

CEM puts together a peer group of 14 other similarly situated public pension plans and matches up NYCERS characteristics with the characteristics of the peer group. See page 2 of the excutive summary for the list of the plans in the peer group.

It appears that CEM has been producing these repots for NYCERS since 2018. See chart on page 1-1.

Stark Conclusion from the Report

"Your total pension administration cost of $349 per active member and annuitant was $202 above the peer average of $147."

Not suprisingly, there weere no questions from the trustees after the presentation.

Details of the $349

NYCERS spent $128,884,000 in FY-2025 with $66,036,000 for PS costs and %62,848,000 for OTPS costs.

CEM broke this down into $101,322,000 for :business as usual" costs and $$27,562,000 for major project costs.

The break down for $349 amount was into the two components:

• $274 for business-as-usual costs conpared to $127 for the peer group and
• $75 for major project costs compared to #20 for the peer group.

CEM atributes the variance in cost per membership to the following items: (see page 4 of executive summary)

• high staff levels - $81 -(521 personnel),
• third party costs - $66 - ($40,253,000), and
• high major project costs - $62 -($22,427,000)

Unfortunately there is no mention in the report about the details of the major projects and there was definitely no mention of the Legacy Replacement Projecy in the CEM report.

History of Variances

NYCERS History of CEM Report

--Year--	NYCERS	Peer Group	Variance
2018	$174	$84	$90
2022	$297	$93	$204
2023	$296	$97	$199
2024	$357	$105	$252
2025	$349	$147	$202

NYCERS Staff Allocation in FY-2025

The CEM report has a chart on page 4-51 which lists the staff allocations and payroll cost.