Court Stay for Retirees Fighting the City's Medicare Advantage Scam

On July 7, 2023, the trial court issued a stay stopping the City from terminating Medicare supplemental insurance, Senior Care, for 139,442 city retirees on Medicare and their estimated 50,000 spouses. As part of the termination the City is jamming these retirees and their spouses into a private Medicare Advantage insurance plan offered by Aetna.

The following is a reported response to the stay from the Mayor:

Mayor Eric Adams’ office said the city is considering appealing the injunction. “We are extremely disappointed by this misguided ruling,” it said in a statement. “The city’s Medicare Advantage plan, which was negotiated in close partnership with the Municipal Labor Committee, improves upon retirees’ current plans, including offering a lower deductible, a cap on out-of-pocket expenses, and new benefits, like transportation, fitness programs, and wellness incentives. Further delay in implementing it will only cause greater uncertainty for our retirees and have a detrimental impact on our city’s budget.”

The statement is at best misleading. The mayor and the Municipal Labor Committee did collude to deprive Medicare eligible retirees of health benefits that have been in place since 1966 since the start of Medicare. The fight over which plan is better is something that the Mayor wants to ignore. The alleged new benefits are not important when compared to access to quality health care, especially when you have serious health issues. The further delay that the mayor is worried about is not a delay but a very real hope that the retirees will keep their health benefits. As I have outlined below the just adopted City budget has sufficient funds allocated to cover the cost of Senior Care for Medicare eligible retirees.

As reported by the actuary in his FY-2022 OPEB report, there are a total of 246,832 city retirees with

• 73,601 (plus 46,510 spouses) who are not eligible for Medicare and
• 173,231(plus 61,646 spouse) who are eligible for Medicare.

When you subtract the 139,442 retirees covered by Senior Care, you are left with 33,789 Medicare eligible city retirees who have elected private health insurance via Medicare Advantage contracts between CMS, the federal Medicare administrator, and private insurance companies. As of January 1, 2022, the City is essentially no longer paying anything for Medicare Advantage contracts (monthly COBRA rate is $7.65). It is not clear why.

The City is currently paying $204.10/month per person for the Senior Care supplemental coverage. (The COBRA premium is $208.18/month).

That adds up to $464M per year - ((139,442 retirees + estimated 50,000 spouses)*$204.10*12).

Note: The Health & Hospitals Corp. and the Housing Authority have 20,205 retirees covered by Medicare supplemental coverage and would have saved money if the termination had gone into effect on Sept. 1, 2023

On June 30, 2023, the City Council adopted the NYC budget for FY-2024. The Mayor had asked for $2.959B for retirees’ health insurance and $5.64B for workers’ health insurance. The final budget cut the retiree health insurance appropriation by $500M down to $2.459B, what appears to be a ballpark number for the Medicare supplemental cost.

As reference, the adopted budget has the following allocations for health insurance:

• Workers $5.644 billion
• Retirees $2.459 billion

Note: The monthly cost for employees and non-Medicare eligible retirees

• without dependents is $923.67, and
• with dependents it is $2,265.67.

Note: The adopted budget also includes

• $896 million for employee welfare fund benefits and
• $449 million for retiree welfare fund benefits.

Just for the reord, that is a total of $9.4 billion for health insurance and welfare benefits for workers and retirees.

Enough Money for Senior Care

The retiree health insurance costs for FY-2024 based on retiree and spouse counts from the actuary’s June-2022 OPEB report breaks down as follows

• Non-Medicare retirees $1.565 billion
• Medicare retirees $0.464 billion
• Part B refunds for Medicare retirees $0.465 billion

The total of these three amounts is $2.494, very close to the $2.459B amount in the adopted budget. It appears that the adopted budget has enough money to pay for the Medicare supplemental coverage for the 139,000 plus Medicare retirees and their spouses, as if the City knew that it was going to have trouble in court.

The Mayor’s initial $500 million request and its final cut seems to have no rationale.

What these numbers show is that the Medicare with Senior Care is the most economical part of the health insurance program for City workers and retirees. In addition, Medicare with Senior Care is the most effective part of that health coverage.

Three Card Monte -- NYC FY-2024 Executive Budget and Health Insurance Costs

On May 31, 2023, retired employees of NYC filed suit against NYC over the termination of their Medicare supplemental health insurance. The City is doing this to save $450.0 million per year. The Health and Hosptials Corp. and the Housing Authority will also save a total $60.0 million per year.

So why is the City so desparate for money that it choose to strip its older city retirees of their health insurance and force them into a second class private insurance plan (Medicare Advatage)? The City could have attacked any number of other programs. Why the retirees?

The City has previously stated that it is giving these savings to the Health Insurance Satbilization Fund (HISF) which in turn allows the City labor unions to funnel the money into their welfare funds. This is already getting comfusing but this may be why the unions sold the retirees down the river.

The City Budget - FY-2022 to FY-2024

In FY-2022, the City adopted a budget of $98.7B. This year, FY-2024, the City is proposing a budget of $106.7B. See chart below.

Health Insurance Costs from FY-2022 to FY-2024

Health insurance and welfare fund costs are embedded in the personal service category.

Again if you refer to the chart below, you can see that the City's health insurance costs have increased significantly from 2022 to 2024: the City spent

1. $5.0B on employee health insurance in 2022
2. $5.2B on employee health insurance in 2023
3. $5.6B on employee health insurance in 2024

Why did employee health insurance increase $400M in 2024? Is this the money that is going to be given to the union welfare funds?

1. $2.1B on retiree health insurance in 2022
2. $2.0B on retiree health insurance in 2023
3. $3.0B on retiree health insurance in 2024

And why did the retiree health insurance costs go up $1.0B in 2024? Isn't the City saving $375M ($450M full year) by terminating insurance for retirees on Medicare.

Welfare Fund Costs from FY-2022 to FY-2024

The welfare funds have dropped since 2022 but not radically. Quite different from health insurance.

1. $1.118B on employee welfare fund benefits in 2022
2. $0.858B on employee welfare fund benefits in 2023
3. $0.876B on employee welfare fund benefits in 2024

1. $0.494B on retiree welfare fund benefit in 2022
2. $0.442B on retiree welfare fund benefit in 2023
3. $0.449B on retiree welfare fund benefit in 2024

Health Insurance and Welfare Fund Costs for NYC

Category	FY-2022 Adopted Budget	FY-2022 Modified Budget	FY-2023 Adopted Budget	FY-2023 Modified Budget	FY-2024 Executive Budget
Total Budget
Personal Service	$53.4B	$54.4B	$52.9B	$52.5B6	$55.6B
Other Than Persanal Service	$45.9B	$53.4B	$47.7B	$52.4B	$48.3B
Debt Service	$1.3B	$6.3B	$2.4B	$4.5B	$4.8
Less: Intra -City Expenditures	-$1.9B	-$2.3B	-$2.0B	-$2.3B	-$2.0B
Net Total	$98.7B	$111.8B	$101.1B	$107.1B	$106.7B
Fringe Costs
Health Ins.-Employees	$5.880B	$5.061B	$5.399B	$5.164B	$5.640B
Health Ins.-Retirees	$2.142B	$2.142B	$2.260B	$1.969B	$2.959B
Welfare Funds-Employees	$1.040B	$1.118B	$0.938B	$0.858B	$0.876B
Welfar Funds-Retirees	$0.491B	$0.494B	$0.442B	$0.442B	$0.449B
Pensions	$9.921B	***	$9.305B	***	$9.525B

New Battle in the City's War on the City's Retirees

In 2021, the former City administration, without a legal opinion from Corp Counsel, tried to force Medicare eligible (ME) retirees to pay for their Medicare supplemental insurance, Senior Care.

This attempt flew in the face of 55 years of practice based on local law and collective bargaining agreements. The City wanted to save the $191 a month per retiree and spouse that it was paying for this coverage so that the City could give that money to the City unions’ welfare funds.

The City did not plan on the retirees fighting back in court and then having them win both at trial and on appeal.

The City then tried to gut the law guaranteeing the City’s obligation to pay for health insurance. That was the law that the court based its decision on. Again, the City failed. This time at the City Council.

Revenge

Now, in retaliation for losses in court and at the City Council, the Adams administration is dropping the 57 year old Medicare supplemental coverage (Senior Care) for older (ME) city retirees.

As of September 1, 2023, the City will force all Medicare eligible retirees and spouses (238,000) into a inferior Medicare Advantage plan (private insurance) which will cost the City nothing. Retirees, however, will be locked into paying whatever the new plan charges for Part D drug coverage. The only retirees to be left alone are the ones in the HIP Medicare Advantage plan (22,300).

This is a more drastic attack on the retirees than the illegal 2021 attempt to force retirees to pay for Senior Care. The City is now arbitrarily and capriciously dropping all health coverage for older retirees other than for the proposed Aetna Medicare Advantage plan. This means about 170,000 Senior Care retirees and spouses will be wrenched out of Medicare and jammed into a private health insurance plan.

It is a absolute fact that traditional Medicare with supplemental insurance is better than any Medicare Advantage plan. Anyone who tells you otherwise, including the mayor or any union rpresentative, is either lying or uninformed. This action is about reducing benefits to save money, period.

In addition, Medicare Advatage insurers have been exploiting Medicare for over a decade as noted by NY Times (4/1/2023):

"Nearly every large insurer in the program has settled a fraud lawsuit for such conduct. Evidence of the overpayment has been documented by academic studies, government watchdog reports and plan audits."

You can just imagine the turmoil that this will cause for very old retirees who will no longer be covered by Medicare and Senior Care. They won’t even know about it until they go to their doctor and are told that they don’t have Medicare anymore.

Also included will be 780 line of duty widows who will have their health insurance turned upside down.

Costs

This attack will potentially save the City $454M per year ($2,400 per retiree & spouse) . Health & Hospital Corp will save $45.8M per year and the Housing Authority will save $16.1M per year. These are rough amounts based on the NYCERS & TRS actuary’s 2022 annual OPEB report. There are some complications which include:

1. 13,000 ME retirees who have non-ME eligible dependents that will still cost the City $27,000 per year per retiree.
2. Non-ME retirees who have waived health coverage but will now re-enroll in GHI-CBP at $10,200 or $27,000 per year

The City claims $600M annual savings but never documents their figures.

Senior Care is the least expensive component of the City’s legal obligation to pay for the costs for health insurance for its workers and retirees. It is also the most effective component of that coverage.

Betrayal

For the City to be able to drop Senior Care, it had to get a majority of the city unions to agree. On March 9, 2023, the UFT and DC-37 agreed to sell out these older retirees, many who were their members when they worked for the City. For what? We can only suspect.

The UFT, however, will have legal (Chapter 504/Laws 2009 Part B - Section 14) problems with these cuts. Any dollar reductions imposed on retiree benefits will have to be matched by dollar reductions imposed on current workers. The UFT has not been honest with their members about this state statutory requirement.

Opting Out

By federal law the City must allow any retiree to opt out of the mandatory Medicare Advantage plan. The City is trying to equate this federal opt out choice to a retiree’s waiver of health insurance benefits. This will be challenged in court. They City does not have the right to penalize retirees for exercising their rights under the Medicare law.

The City is pushing this waiver concept for retirees opting out because they want to be able to:

1. stop refunding Part B premiums to these retirees
2. terminate any welfare drug subsidies they receive (possibly all welfare benefits) and
3. drop health insurance coverage for dependents of these retirees.

This plan is punitive on it face and reflects the City’s anger at having been beaten in the courts and at the City Council. It also reflects the betrayal by the unions of the retirees.

Retirees with sufficient financial resources will have a choice to avoid the garbage MA plan but most retirees will not have the money to opt out.

Choice

In 1965, choice was the driving concept behind the City – Union agreement to offer health insurance to workers and retirees.

The City's 1965 letter to the Board of Estimate

The City of New York Department of Personnel- City Civil Service Commission,
220 Church Street,
New York, N. Y. 10013,

December 14, 1965.

To the Board of Estimate: Subject: Proposed Resolution Extending Choice of Health Insurance Plans to Active and Retired City Employees. Gentlemen—

On October 24, 1946, the Board of Estimate adopted a resolution ( Cal. No. 11), approving a proposed agreement between The City of New York and the Health Insurance Plan of Greater New York for the furnishing of medical benefits to the employees of The City of New York or of any agency or department thereof, who are paid out of the City treasury, and their families, who voluntarily elect medical coverage.

The City was prompted in entering into this agreement with the Health Insurance Plan of Greater New York and in authorizing the payment of up to 50 per cent of the premiums of the medical, surgical and hospital insurance coverage by the great need for The City of New York to provide for and protect the general health and welfare of its employees and their families. The City took into consideration the fact that sickness and physical disability of employees or members of their families are responsible for the loss of many man-days in each year's work, are reflected in lower morale among employees and affect their work and productivity.

Your honorable Board, on February 11, 1965, adopted a resolution ( Cal. No. 155), which allowed The City of New York to contract with the Associated Hospital Service of Greater New York ( Blue Cross), Group Health Insurance, Inc. ( G.H.I.), United Medical Service, Inc. ( Blue Shield), and the Metropolitan Life Insurance Company, to provide a choice of health insurance plans for certain employees in the uniformed forces of The City of New York.

As a result of collective bargaining negotiations entered into with the representatives of certain classes of employees in the uniformed forces and other occupational groups; personnel orders were issued by his Honor, the Mayor, and determinations made by the Comptroller in the case of employees subject to Section 220 of the State Labor Law, providing for the assumption by The City of New York of

- 75 per cent of the total payment for choice of health and hospital insurance during the first year of such choice, not to exceed 75 per cent of the full cost of H.I.P.-Blue Cross (21-day plan) on a category basis, and, thereafter, of

- 100 per cent of the full payment for choice of health and hospital insurance, not to exceed 100 per cent of the full cost of H.I.P.-Blue Cross ( 21-day plan) on a category basis.

It appears desirable that the City institute a uniform policy for all City employees with respect to choice of health and hospital plans. Therefore, in line with the resolutions previously adopted by the Board of Estimate and with the various personnel orders issued by his Honor, the Mayor, on the choice of health and hospital insurance plans, with the assumption by the City of a greater share of premium costs, there is herewith presented for your consideration and determination a proposal, in which the Director of the Budget and I concur,

providing
- to all City employees who are eligible for H.I.P.: Blue Cross coverage and
- to retired employees,
health and hospital insurance benefits, which are the same as, or equivalent to, those offered to members of the uniformed forces and other categories of City employees.

Respectfully submitted, THEODORE H. LANG, City Personnel Director.

Retiree Data

Medicare Eligible Retirees with Senior Care out of all Medicare Eligible Retirees

Agency	Senior Care Retirees	Spouses	All Medicare Retirees	Spouses
City -	139,442	49,320	173,231	61,646
HHC	15,156	3,940	20,110	5,266
HA	5,046	1,660	6,741	2,217
WFA	2	0	5	1

NY Times: NYC Pension Funds and "Operational Failure"

On Tuesday, January 26, 2016, the NY Times reported the public release of a study analyzing the investment capabilities of the NYC Comptroller's Office. The NY Times article focused on the expression "danger of operational failure" to summarize the opinion of the report. The city paid Funston Advisory Services $1.4M for the 406 page report.

According to the following exert below from the report, the Comptroller's Office is currently not up to the job and needs lots of money to get the office into shape.

Our overall conclusion is that additional resources are required or the current investment strategy presents a very high level of operational risk. This is a problem that has been growing over the course of multiple administrations. It requires a long-term solution, long-term leadership, the support of the Systems, and long-term resourcing, but it also demands immediate action.

Continuous improvement (doing what BAM already does, but better) is necessary but not sufficient. Discontinuous improvement (doing new things in new ways) is also required. Unfortunately, given its existing resources and demands, BAM’s management currently has little or no capacity to implement many of the recommendations of this report.

To me it appears that the study was designed to help the Comptroller hold onto his annual designation as investment manager and his control over the investment process at the five city pension funds. I also suspect that the Mayor's Office is pushing to outsource the management functions of the pension fund so as to remove the heavy political influence that emanates from the Comptroller's Office.

As a example of this political influence, one of the people listed by Funston Advisory as a member of their team is a man named Jon Lukomnik. Jon worked for The NYC Comptroller Alan Hevesi from 1994 to 1998 as his representative on the NYCERS Board of Trustees. In FY-1997 Jon lead the move to allow Hevesi complete control of all of the NYCERS investment contracts and the payment of the fees outlined in those contracts. This is exactly one of the primary sources of the current chaos in the Comptroller's Office. As NYCERS executive director I specifically opposed this move in 1997 but for some reason the mayor's Law Department went along with this take over.

As long ago as 2011, I pointed out the improper activities by the Comptroller's Officewhen it came to investment contracts and fees for the pension funds. As recently as November of 2015, I again pointed out the mess at the Comptroller's Office. This report, however, documents in details how bad the internal operational problems are at the Office of the Comptroller.

The real reason the Comptroller's Office has become overwhelmed with the investment process is that trustees of the five city pension funds have made terrible investment decisions over the last 15 years.

The solution to the trouble at the Comptroller's Office is not more staff, higher salaries, and more spending. The real change needed is much more simple than what the report recommends but just as radical.

Instead of spending more money and hiring more people, all five funds should radically simplify their investment strategies. Invest only in 1) direct US stock index funds (S&P 500 or Russell 3000) and 2) Treasury, high rated corporate, and agency bonds.

They should reduce the number of investment managers and have a target of ten managers for each fund. They should also set a target for investment fees of 10 basis per year.

When the dust settles, the Comptroller's Office will be able to do its job with mere mortals. The five pension funds will earn more returns on their assets, pay far less in fees and the city will save on pension costs.

Of course, the Comptroller would be totally irrelevant politically and lots of of people on Wall Street would be out of a job.

While the trustees are reforming things, they should consider the following suggestion. Since the pension funds are already paying the Comptroller to do such a tenuous job managing their investment activities, they should put out a RFP for the work to see if they could get the job done better at lower cost. That is what the Comptroller did with his pension custodial and cash management work.

And another thought. Don't you think that when a new Comptroller comes into office, that he/she will want to replace all those highly paid provisionals in the Bureau of Asset Management with his/her own "experts".

The following is another quote from the report that is indicative of the quality of the report:

The reduction in the number of investment committee meetings will go a long way toward alleviating BAM’s workload. This reduction will free up executive time to address much needed strategic and operational improvements, but BAM still requires additional resources for both staffing and modernized systems. In combination with our recommendations, BAM can make significant progress toward becoming a world-class investment operation.

If the proposed reduction of investment committee meetings had failed to be accepted, we believe BAM and the Systems would have had a basic choice to consider: 1) increase the level of BAM resources to fully implement the recommendations (people, processes and systems) contained in this report; or 2) reduce the complexity of the asset allocation to a level which can be supported by the current level of resourcing.

This is utter garbage. The jamming of the monthly investment board meetings for the five city pension funds into one meeting accomplishes only one thing. That is the staff at the Comptroller's Office only has to put on its dog and pony show once a month instead of five times. The cock and bull story about the five board meetings per month being such a burden is just a smoke screen for the total chaos that is happening in the Comptroller's Office.

It is interesting that up to 70% of any investment meeting is held in hidden executive session. How does the Comptroller's staff handle access to info for specific pension fund that it deems to be covered by executive session when five different groups of trustees are sitting in the meeting? I hope everyone realizes that the five funds do make different investment decisions. TRS has actually been able to avoid investing in hedge funds.

Of course, we all know that there is very little that honestly qualifies for executive session.

If there wasn't so much garbage in the investment portfolios, it would take the Comptroller's staff one day to prepare for a regular investment board meeting. Of course you might start to wonder what they were doing for the rest of the month.

The Board of Trustees for each of the five systems are responsible for the prudent investment of the each of the funds, not the Comptroller. His/her annual delegation is at the discretion of the trustees of each of the five funds.

Stop the Bleeding - Public Pension Funds Under Attack - Report and NY Times article

I have been hammering the NYCERS trustees for several years about about their investment decisions, in particular, allocations to private equity, real estate partnerships, and hedge funds.

Now there is a growing record of how misplaced these investments are for public pension funds.

Read the October 20, 2013 NY Times article by Gretchen Morgenson, Ted Seidle's recap article in Forbes on the investigation to the assault on the Employee Retirement System of Rhode Island, and the broad sweeping expose in Rolling Stone magazine.

Here is the link to the full investigative report.

Maybe the new mayor could find the money for his pre-K program by stopping the bleeding of the pension funds by Wall Street.

NY Times - Sorkin - Pension Investment Consultants - Transparency - Where the Money Comes From

In an October 1, 2013 NY Times article Andrew Ross Sorkin writes about the investment consultants that are hired by U.S. pensions funds. His focus is the lack of transparency with respect to the performance of these consultants.

While anyone hiring an investment consultant should want to know the quality of the advice that the consultant has given in the past, what is even more important is how does the consultant makes his/her money.

With respect to pension funds, investment consultants primarily provide advice on asset allocation and help in the selection, monitoring, and termination of investment managers. Unfortunately these consultants earn revenues not only from pension funds but also from investment managers that the consultants are hired to monitor.

Years ago I told my young son the story of the emperor's new clothes. It made no sense to him that people at court would not have told the emperor about the scam. Why did it fall to the child to point out the obvious?

The entire pension fund industry knows that the investment consultant structure is broken but as in the story there is shortage of courage among the adults. It is obvious that the pension funds should insist that investment consultants earn only revenue from pension funds and never anything from the investment managers that they are required to critique. Of course, pension funds would have to pay the investment consultants a lot more money. It would, however, be money well spent.

As further background on this structural flaw refer to this old posting I wrote in 2010. If anything, the situation has gotten worse since then.

NY Times - Pensions - Detroit

On July 20, 2013 Mary Williams Walsh wrote the following highlighted article in the NY Times concerning the newly discovered deficit in the two Detroit municipal pension plans and the city's pending bankruptcy action. Ms. Walsh has written many pension articles in the past. Like most commentators on public pension plan issues, however, she never addresses the whole picture. Not that what she reports is necessarily incorrect but that it is incomplete.

For the record, the one issue I never hear reported is the miserable investment performance of public pension plans and how much this contributes to pension underfunding. There are also many questionable investment decisions that the NY Times never reports. It's a great newspaper but it's not always on the cutting edge.

In this article Ms. Walsh points out a sudden increase in Detroit's reported pension underfunding and lays a large amount of blame at the door of widespread actuarial practices which have lead to long term shortfalls on employers' contributions to most public pension systems around the country.

This is a valid and accurate statement but it is not a secret. Everyone in the public pension community knows that the plan actuaries have not been providing good numbers for a long time. Their chief sin has been the use of investment targets that are far to high. This has systematically lead to underfunding of the plans. It has also lead to reckless investment strategies adopted by plan trustees trying to hit the unrealistic targets. It also created the excuse to hire investment firms with outrageous fee structures.

Generally actuaries are very bright mathematicians but like all of us they are usually short on courage. No one wants to lose his/her job. That is what would happen if an actuary came in with the real numbers. So, they do what most of us would do. They bend and twist to keep the parties with power happy.

Below is an extract from Ms. Walsh's article that describes this problem. Towards the end of the extract Ms. Walsh mentions a "Blue Ribbon Panel" set up by the Society of Actuaries which was formed to look into how to address the reputational risks that "bad" numbers were creating. One of the panel members that she idnetifies is Robert North, the NYCERS and NYCTRS actuary. North has a questionable history on his own interest rate assumptions for the city pension funds. I listed below the interest rate changes he has recommended while working for NYCERS. Walsh doesn't seem to be aware of the inconsistency in having North on this panel.

This made me do a little homework. I checked the Society of Actuaries web site and listed all the panel names below. One of the names that Walsh did not identify was Mike Musuraca. For many years Musuraca worked for DC-37, a municipal union with a recent history of corruption while he was working there. He represented DC-37 on the NYCERS Board of Trustees for investment issues. In 2009 he went work for a private equity firm, Blue Wolf Capital, but not before he voted to hire Blue Wolf as private equity firm for NYCERS. Here is a little more background on Blue Wolf Blue Wolf.

When someone like Walsh has these issues in front of her and she doesn't address them, you wonder whether she serious about the problem.

Extract from NY Times article, July 20, 2013

But that is not what happens. To calculate a city’s pension liabilities, an actuary instead projects all the contributions the city will probably have to make to the pension fund over time. Many assumptions go into this projection, including an assumption that returns on the investments made by the pension fund will cover most of the plan’s costs. The greater the average annual investment returns, the less the city will presumably have to contribute. Pension plan trustees set the rate of return, usually between 7 percent and 8 percent.

...

A few years ago, with the debate still raging and cities staggering through the recession, one top professional body, the Society of Actuaries, gathered expert opinion and realized that public pension plans had come to pose the single largest reputational risk to the profession. A Public Plans Reputational Risk Task Force was convened. It held some meetings, but last year, the matter was shifted to a new body, something called the Blue Ribbon Panel, which was composed not of actuaries but public policy figures from a number of disciplines. Panelists include Richard Ravitch, a former lieutenant governor of New York; Bradley Belt, a former executive director of the Pension Benefit Guaranty Corporation; and Robert North, the actuary who shepherds New York City’s five big public pension plans.

The commplete list of members of the Blue Ribbon Panel

Chair: Bob Stein, FSA, MAAA, Retired, Ernst & Young
Co-Vice Chair: Andrew Biggs, American Enterprise Institute
Co-Vice Chair: Douglas Elliott, Brookings Institution
Bradley Belt, Palisades Capital Management, former executive director of the Pension Benefit Guaranty Corporation
David Crane, Stanford University, former advisor to Gov. Arnold Schwarzenegger, CA
Malcolm Hamilton, FSA, FCIA, Retired, Mercer, senior Fellow, C. D. Howe Institute
Laurence Msall, The Civic Federation (Illinois)
Mike Musuraca, Blue Wolf Capital Partners, former trustee of the NYC Employees Retirement Systems-NYCERS and formerly of American Federation of State, County and Municipal Employees
Bob North, FSA, EA, MAAA, FCA, FSPA, New York City Office of the Actuary
Richard Ravitch, Co-chair, State Budget Crisis Task Force, formerly Lt. Governor of New York
Larry Zimpleman, FSA, MAAA, Principal Financial Group

Assumed Interest Rate History under Robert North (1990 to 2013)

1. 7/1/1995 9.0% to 8.75%
2. 7/1/1999 8.75% to 8.0%
3. 7/1/2011 8.0% to 7.0% (net of fees)

I don't have the documentation describing the origin of the 9% rate and my memory is a bit weak that far back. It is quite possible, however, that North also make the recommendation for 9%.

NY Times - David Chen - Bloomberg - Investments

On February 16, 2013 David Chen wrote an article in the NY Times about the NYC Teachers' Retirement System decision to divest itself of any investments in five gun companies.

The catch to the story was that the vote was 4 to 1. The opposition vote came from the a trustee appointed by the mayor.

Mr. Chen went on to state in his article that

"The mayor has long recused himself from any pension decisions because his company, Bloomberg L.P., does business with all the pension funds, his aides noted."

After over 11+ years in office this is the first time I have heard that mayor has had a long held policy of recusing himself from pension decisions.

Bloomberg L.P. does not do business with NYCERS and I suspect that is true for the other four city pension funds.

While the mayor is not a trustee of any of the five funds, his appointed representative at NYCERS has consistently voted on all resolutions voted on by the Board of Trustees. Again I suspect that is true at the other four funds.

My point is that Mr. Chen needs to do a little more homework when dealing with the mayor's office and pension issues.

It is ironic that Mayor Bloomberg's fortune has grown so well over the last 11+ years, while the city pension funds have struggled during his tenure in office.