Every Halloween the Comptroller releases the City's finacial report for the previous July-June budget year.
During the year ending on June 30, 2022 the City spent
- $9.7B on pensions,
- $13.2B on fringe benefits,
- $31.0B on salaries, and
- $52.7B on other than personnel services, the famous OTPS expenses.
Of the $13.2B for fringe benefits
- $8.7B went for health insurance for workers and retirees,
- $2.3B went for Social Security contributions,
- $1.4B went for welfare benefit funds (both city and union),
- $0.13B went for union annuity funds,
- $0.6B went for workers comp insurance and other items.
Of the $8.7B for health insurance,
- $6.5B went for workers health insurance,
- $1.3B went for younger retirees health insurance,
- $0.5B went for older retiress health insurance, and
- $0.5B went for Medicare Part B premium refunds.
Attack on Older Retirees
The Mayor (and the MLC) wants to stop paying for the GHI supplemental health insurance for city retirees and their spouses who are covered by Medicare. The Mayor wants to force all of these retirees into a Medicare Advantage plan. It is an inferior insurance plan as compared to the supplemental plan but, of course, the City does not have to pay for the Medicare Advantage plan.
Last year the City tried to ram this down our throats but it lost its attempt in court. It now wants to cut the law (Section 12-126) that protects retirees health insurance. It also protects workers health benefits.
There are 139,442 city retirees covered by the GHI supplemental plan along with 20,205 retirees who retired from the Health and Hospitals Corp and the Housing Authority.
The monthly cost for each retiree and each spouse in this group is $201. The City's total cost in FY-2022 for the GHI supplemental insurance for city retirees was $425M and $87M for HHC and HA retirees.
Any US citizen eligible for Medicare can signup for a no premium Medicare Advantage plan. The City is offering older retirees something they already have, whether or not they are a city retiree. What the City is really trying to do is to abort its current obligation under law to pay for health insurance coverage for older city retirees and their spouses.
Other Ways for the City to Save Money Without Beating up on Retirees
During FY-2022, the City incurred the following expenses:
- $269M in administrative expenses for the five pension systems. That cost could be cut in half ($135M) and still improve services. I know, I was the executive director at NYCERS for many years.
- $1.5B in investment fees at the five pension systems which lost $31.0B during the year. The systems should be required to limit fees to 20 basis points of assets. That would save $1.0B a year.
- $2.1B to subsidize the teachers deferred compensation plan (403-b plan). No other city employees receive this subsidy. This is in addition to the cost of the teachers regular city pension benefit. This benefit could be radically cut or eliminated with a huge savings to the City. And in a counterintuitive view, members of TRS would probably make more money if they deversified their assets rather than parking them in the guaranteed stable income fund.
