The five NYC pension systems

There are five public retirement systems in which City of New York participates. They are:

• 1) NYC Employees Retirement System (NYCERS)
• 2) NYC Teachers Retirement System (TRS)
• 3) NY Police Pension Fund (NYPPF)
• 4) Fire Department of NY Pension Fund (FDNYPF)
• 5) Board of Ed Employees Retirement System (BERS).

Each one is quite different. Each has its own board of trustees. Each has different benefit structure and demand for benefits. This in turn creates different cash flow requirements.

NYCERS has a diverse membership with multiple participating employers in addition to the city. There are three union locals represented on the board of trustees.

TRS has a mostly uniform membership with one basic participating employer, the city. It also has a very powerful labor union, the UFT, holding 3 out of 7 votes on the board of trustees.

NYPPF has a membership made up of only police officers (all ranks) and the city is the only participating employer. This system offers a 20 year and out retirement plan. There are five union locals represented on the board of trustees

FDNYPF, like NYPPF, has a membership made up of only firefighters (all ranks) and the city is the only participating employer. This system offers a 20 year and out plan but has a very high occurrence of disability retirements. There are four union locals represented on the board of trustees

BERS is a relatively small system with a membership made up of non-teaching employees and substitute teachers working for the NYC Board of Education (aka the Department of Education). There are two union locals represented on the board of trustees.

............................Assets as of June 30, 2008......... City contribution for FY-2009

• NYCERS .......................$39.7B ..........................................$1.14B
• TRS ...........................$32.3B ...........................................$2.11B
• NYPPF .........................$21.1B ..........................................$1.86B
• FDNYPF .......................$ 7.2B ..........................................$ .82B
• BERS .........................$ 2.2B ............................................$ .12B

It is clear that the chief source of pension costs for the city comes from the teacher, police and fire systems. NYCERS has a much lower per member annual cost. It has at least 95,000 city members. This translates into a $12,000 per member cost for FY-2009.

To effectively reduce the city’s pension costs the city will have to focus on the teachers, police and fire pension benefit costs. The city will also have to seriously review the investment policies of each of the five retirement systems.