Wednesday, October 25, 2017

The First Step for the New Executive Director

It has been almost two months since the new executive director, Melanie Whinnery, started working at NYCERS. It is a good size organization with its own unique legal structure. Many of the employees have been there for over 30 years. In fact one employee has been working since Eisenhower was president. I suspect Ms. Whinnery is still trying to get her bearings.

She does, however, have to quickly come to grips with who she is going to have sitting in the office next to her. He or she will be her number two person at the agency. She needs someone who she can really trust, someone she has known for a long time, and someone who has had her back over that time. That means that person is not on staff at NYCERS. She needs to reach out to someone in Albany who she knows and can trust. This is not a position that needs a open search. This is about protecting your back.

This will be the most important decision she will make at NYCERS. Trust me, I know from experience. I got it right once and wrong the second time. You can not begin to imagine the havoc that the wrong choice will bring and there is definitely a lot of work to be done to straighten out the agency.

A word of caution: the current deputy executive director has a strong motive to see the new executive director fail and leave. In addition, if she remains in the number two spot, the current staff will know that nothing has changed.

Friday, October 20, 2017

COVSF Benefit Payment for December 2017

The NYCERS Board had their October Regular Meeting last Thursday, October 12, 2017.

For over 50 minutes the trustees were treated to a song and dance by the IT director on the delayed two and half year old legacy upgrade project.

In contrast, over a two minute period the representative of the NYCERS Actuary, Sherry Chan, presented the trustees with Ms. Chan's FY-2017 financial and accounting report for the five city pension funds. Ms. Chan was not present. No questions were asked.

On a positive note, the NYCERS's closing balance increased from $55.49B to $61.32B during FY-2017. NYCERS was able to transfer $285.77M into the Correction Officers' Variable Supplements Fund (COVSF) in FY-2017. Of course, it would be very informative if the actuary would provide the details of the calculation of how she arrived at the $285.77M figure.

FYI: As of July 1, 2017 the COVSF Board is responsible for investing $288M. I hope someone told them to get busy.

Now the big question is will there be a payment this December for the COVSF service retirees. Below is the COVSF payment history for the last five years. It looks very promising. Last year, 2016, there was no December payment.

COVSF History 2013-2016
Year Open Balance Interest Earned "Skim" Payments Close Balance
FY-2013: $35.925M $0.038M $0.000M $0.000M $35.963M
FY-2014: $35.963M $0.020M $190.000M $38.014M $187.969M
FY-2015: $187.969M $0.010M $30.012M $78.285M $139.706M
FY-2016 $139.706M $0.184M -$52.7240M $82.149M $5.017M
FY-2017 $5.017M $0.300M $285.924M $2.624M $288.165M
FY-2018 $288.165M

Note: The $82.149M paid in FY-2016 (July 2015 - June 2016) represents payments made in December 2015