Public Employee Pensions In NY and NJ: 2013 Data (and Commentary on NYC Comptroller Stringer’s Deceptions, Etc.)

This is a “give the people what they want” post. After recently completing two analyses of public employee pensions for 50 states over 20 and 40 years, I’m not really up to do another one. And yet I find that the database of Census Bureau data I compiled on the individual public employee pension funds in New York and New Jersey, and the related posts I wrote, a year and 20 months ago are still among the most read and downloaded on “Saying the Unsaid in New York,” according to WordPress.

The Bureau has released data for FY 2013, and I have appended it to the database I compiled previously. And updated the charts for New York City, New York State and New Jersey teacher pension funds, the New Jersey and New York City police and fire pension funds, and the funds for other employees in New York City, New York State and New Jersey. These are linked below. I’m not going to write another three posts on this data – there aren’t enough changes from year-to-year to make it worthwhile. But I do plan to comment on some items that have come out (or not come out) in the news over the past year. Because every year, ordinary people and younger generations get robbed in NYC via public employee pensions. Just like on Wall Street.

The updated database, with all the data I could download on individual pension plans in New York and New Jersey, is in this same post on Saying the Unsaid in New York.  It is too large to fit here.

The post I wrote on teacher pensions last year is here,

And the spreadsheet, with the charts extended through FY 2013, is here.

Long Term Teacher Pension Charts NYC NY NJ

The post I wrote on police and fire pensions last year is here,

And the spreadsheet with the charts updated is here.

Long Term Police-Fire Pension Charts NYC NJ Etc

Finally, the post I wrote on the large pension plans for other employees is here,

And the spreadsheet with charts updated is here.

Long Term General Pension Charts NYC NY NJ (2)

Now for the commentary.

No Shame At All

Incredibly, with a pension disaster unfolding across the country, two Governors that contributed to it have the nerve to run for President: Pataki of NY and Christie of NJ. What is their slogan? I’ll do for Social Security what I did for the NJ/NYC pension funds? Too late – Social Security is already in trouble, as I noted here.

NYC Comptroller Scott Stringer: A New Pension Liar With A New Pension Lie

As part of their ever increasing retirement benefits, New York City teachers have a 401K-equivalent plan in which they are guaranteed a 7.0% return – and New York City taxpayers make up any shortfall. No matter what the consequences. Until recently, this was correctly tabulated as an employee benefit, part of the high and rising cost of public schools in NYC.

As noted in the FY 2013 CAFR for the New York City Teachers’ Retirement Pension plan, in the table on page 2.11 and described on page 2.16: Benefit Payments and Withdrawals.

Included in withdrawals is the fixed interest credited on TDA member account balances (7.0% APR for UFT members after 12/09/09; 8.25% for non-UFT members and for UFT members prior to 12/10/09), owed and transferred to the TDA program. TDA interest payments of $1.0 billion and $946 million were classified as part of the benefit payments and withdrawals for Fiscal Year 2013 and Fiscal Year 2012.”

But for FY 2014 and presumably going forward, it will be tabulated as money that wasn’t paid into the pension fund by taxpayers, or an investment return that was not received.

As shown in the table on page 2.8, which notes that for 2012 and 2012 “certain amounts have been reclassified to conform to the 2014 financial statement presentation.”

On page 2.10 it notes that:

As a result of the new combined presentation of QPP (qualified pension plan) and the TDA program assets and a change in the accounting policy for recording the transfer of statutory-interest due to the TDA from the TDA from the pooled QPP/TDA investments, statutory interest transferred from the QPP to the TDA program no longer appears as a separate line item and is no longer part of QPP benefit payments and withdrawals. Accordingly, the amount of benefit payments for June 30, 2013 and June 20, 2012, as reflected in the above table, are $1.0 billion and $946 million less than the value reflected in the prior fiscal year financial statements due to a reclassification of TDA statutory interest payments.”

So here is a $billion dollars and rising that NYC taxpayer have to pay, no matter how high their taxes rise and no matter how much their services get cut as a consequence, that is paid to current and former NYC teachers. That is simply made to vanish as an expenditure. And presumably starting with next year’s report, the note that this payment was every classified as an expenditure will disappear. They were probably expecting no one would notice.

Presumably, NYC public school spending on employee benefits as reported by the city to the NY State Department of Education, and from there on to the U.S. Census Bureau as part of national education finance data, will also be slashed by $1 billion -plus. So the United Federation of Teachers can claim its member are underpaid, and assert their right to do a less good job or be paid even more.

Clearly this is a lie. Where did union-backed Comptroller Stringer get this idea? Probably from the police.

As I noted in last year’s post on police and fire pensions in NY and NJ (very end of the post), Census Bureau data shows the rate of return on investments for the New York Police Pension Fund Article 2 has been, over the long term, radically lower than any other pension fund or the average for pension funds anywhere. How could this be? I thought it must be some kind of error.

Well the Citizen’s Budget Commission looked into it, and got the answer.’s-pension-funds

On December 15th, about 41,600 retired New York City police, fire, and correction officers will receive a $12,000 check. This payment, known as the Variable Supplement Fund (VSF) payment and informally referred to as the “Christmas bonus,” is made annually to eligible retirees in addition to their regular pension. These payments will total approximately $500 million in 2014. VSF payments are not only a benefit typically not available to retired officers in other jurisdictions, they also are a drain on the fiscal health of the pension funds.”

So instead of reporting that former police officers receive a pension that includes an extra $12,000, the police pension fund reports that its investments returned $500 million less than they actually did.   So they distort the data so they can claim the reason taxes have increased and services have been cut isn’t that police officers receive a pension even more richer than retirement any age after working just 20 years, of half pay based on the final year salary (including pension-spiking overtime and promotion), with a partial inflation adjustment. It is because “Wall Street stole our money!”

The entire world of pension reporting consists of insiders grabbing more and more and lying to outsiders who pay more and more for less and less. Why is there frequently an “employee contribution” that the “employer” (ie. taxpayers) pays, instead of just admitting there is little or no employee contribution? So the unions can claim “we paid for our pensions” when the hidden and deferred consequences come due.

This is why the unions (and Wall Street) mobilized to make sure insider Scott Stringer was elected NYC Comptroller in 2013. And why all the newspapers endorsed him. They wanted somebody in on the deal. And to think that a former NYC Comptroller, who later went to jail, once claimed that the MTA had “two sets of books.”

The New City Actuary: In the Witness Protection Program

In addition to Stringer and the union-controlled pension boards, the other person who has to sign off on all these lies is the City Actuary. The only reason we know (or at least I know, and I’m saving the teacher pension reports in case they get altered and whitewashed later) about half the deals that went down is that former City Actuary Robert North took on the mantle of a reformed sinner and made some well-hidden disclosures after all the damage had been done. He left last year, and Mayor DeBlasio and the unions formed a committee to find a pliable shill to take his place, as I noted here.

Not long ago I asked a reporter why no replacement City Actuary had been appointed more than half a year earlier. She responded that she had recently found out that such an actuary is in fact in place.   The appointment was apparently announced,

but it was not widely reported in the press. I didn’t hear about it, and when you try to search for it on Google, what you come up with is the appointment of the former New York City Actuary 25 years ago,

and an article on his retirement. And my posts demanding that he be fired because of what he allowed to be done to the current residents of NYC back in the past, without raising objections.

And apparently no one has interviewed the new New York City Actuary, and her and asked probing questions. Such as “why have NYC residents been forced to endure tax increases, fee increases and service cuts due to pension underfunding, and what led up to this?” Or “given the history of retroactive pension increases that ‘cost nothing,’ shouldn’t we be pre-funding 90 percent of future NYC firefighters retiring with disability pensions, or all future NYC teachers retiring at age 55 or younger, to avoid being stuck with such a disaster again?”

In law enforcement, people are put in the witness protection program after they rat on a criminal syndicate. But in public pensions, one ends up there to make sure they don’t rat on “this thing of ours.”

Restoring The Right to Disability Fraud

As I noted a year ago, based on Census Bureau data share NYC police officers and firefighters receiving more lucrative disability pensions is so high that it is almost certain that widespread disability fraud – leading to higher pension payouts, has gone on in the past. As part of the recent spat between Mayor DeBlasio and the NYPD, additional data was released that implied this was certainly the case. The cost was so high and the data so blatant that even the NY Post felt compelled to report it.

Andrew Cuomo’s ugly pension gambit

By extending Tier 2 disability benefits to Tier 3 members, it would perpetuate a system in which disability pensions have become downright common for city firefighters, in particular. Tier 2 disability pensions — which Cuomo now apparently favors restoring — were claimed by 73 percent of the 6,121 firefighters retiring between 2002 and 2013, according to city pension records.”

And this isn’t just a post-9/11 trend; from 1994 to 2001, the number of firefighters with disability pensions rose from 40 percent to 60 percent of the annual total. Police disability retirements peaked at 40 percent of the total in 2009; as of 2013, the number still came to 21 percent. Disability pensions are much less common outside New York City. In 2014, only 6 percent of the new retirees in the state’s police and fire pension system were receiving full accidental disability pensions. Not by coincidence, New York City’s fire and police pension funds also have large unfunded liabilities.”

I guess one of the tragedies of 9/11 is that a much higher share of the police officers and firefighters getting disability pensions at ¾ of their final year’s salary were actually disabled.

As expected, based on every decision that has been made for the past 35 years, police officers and firefighters hired after 2009 and legitimately severely injured on the job were among those screwed to make up for the abuses that came before.

This is the typical “pro-union” solution, particularly when, as is the case with the NYPD and NYFD, younger officers and firefighters are more likely to be Black and Latino. But the unions began to get pushback from their younger members, and demanded that the right to disability fraud be restored.

The DeBlasio Administration countered with a proposal to restore ¾ pensions to those severely disabled enough to qualify as disabled under Social Security. But the NYC unions don’t own the federal government, and a federal prosecutor recently uncovered the fraud that NYC and state officials had ignored for decades.

The federal government was able to get convictions for defrauding Social Security, so the police and firefighter unions refused to agree to a deal that would involve Social Security in determinations of their disability. In doing so, the police officer and firefighter unions are holding legitimately injured police officers and firefighters hostage in their battle to restore their right to disability fraud.

So now the firefighter’s union and Mayor DeBlasio have reached a deal that, like the rest of the deals taxpayer pay for, is being kept secret from them. So when deciding how much more has to be paid into the firefighter pension fund, how high will the City Actuary decide the future rate of disability retirement will be, and on what basis?

Why would the NYC public employee unions believe that their members have a right to disability fraud? Because in public union-think, if you get away with something long enough it becomes part of the “working conditions” to which they are entitled. That is what the Long Island Railroad workers, themselves found guilty of committing widespread disability fraud, claimed in an attempt to overturn their convictions – again, in federal court, as a result of a federal prosecutor.

A federal appeals court Monday affirmed the convictions of three leaders of a massive disability fraud scheme at the Long Island Rail Road, ruling that the failure of regulators to crack down on the scheme didn’t mean it wasn’t a crime.”

As at the NYPD and NYFD there was no crackdown because labor and management were part of the same cabal, with each just as likely as the other to commit disability fraud. Many police officers, firefighters, and LIRR workers were certainly legitimately disabled, and others didn’t commit disability fraud according to their own conscience. But being “rat” so that the serfs of NYC can get more public services and benefits in exchange for the highest state and local tax burden in the country is something else entirely. That no member of the group, and no NY politician, would do. All three unions have member that tend not to live in the city, and the MTA does not make LIRR customers pay for the higher level of abuse in that subsidiary by themselves. Some of that cost is passed on to subway riders.

New York City and State officials elected with union support have a different view of the right to fraud. For example, it turns out that many relatives and former relatives of NYC teachers and former teachers had been receiving health insurance paid for by city taxpayers, even though they were ineligible.

These ineligible recipients include divorced spouses or children who aged out of parents’ health plans. The city claims eliminating ineligible family plans would save $8,500 per person. Removing from the rolls those who get city-paid benefits even though they are ineligible is a good thing.

But why is this action part of a negotiated labor agreement? Shouldn’t rooting out people ineligible for benefits be what the city government does as a matter of course? To add insult to injury, the Bloomberg administration actually began identifying the very same waste and fraud last year, only to be battled every step of the way — including by a lawsuit filed by organized labor initially to block an audit of employees.”

So NYC teachers got bigger raises as compensation for less fraud. My guess is that after a respectable interval the fraud will resume anyway, and no NYC politician will dare to talk about it.

The Truth Comes Out Elsewhere

While much regarding public employee pensions remains under Omerta in New York, the realities are out elsewhere. One might want to read up on California and Illinois to get a sense of what isn’t being talked about in NYC.

In right wing, Tea Party Marin County California, a civil grand jury found that the people had been cheated by secret deals to increase public employee pensions. Oh, wait a minute! That’s progressive, left wing Marin County! I guess “progressive’ means something different there than here. Particularly since there political participation by ordinary people is much higher there than here, and they have civil grand juries, initiative and referendum, etc. etc.

Marin County’s civil grand jury has again proved itself to be a proactive agent for reform and good government. The publication of its latest report, “Pension Enhancement: A Case of Government Code Violations and A Lack of Transparency,” is an exposure from a Marin perspective how the Golden State’s public employee pension systems zoomed out of control.”

The grand jurors explain that in just one six-year period, between 2001 and 2006, there were 36 pension enhancements by just four Marin agencies, “each of which appears to have violated disclosure requirements and fiscal responsibility requirements” of California law.”

I guess seeing taxes soar and public services cuts has prompted some questions in California, where the media reminds people over and over that the diminished life they are facing is, in large part, a result of massive 1999 retroactive pension increase that was not debate, suddenly passed, and claimed to “cost nothing.”

While in California, as in NYC, the public employee unions are mostly to blame for what is happening, in Illinois past taxpayers as well as the unions are to blame. And Crain’s Chicago Business recently reported on the whole sorry history. Video.

And full text.

There are many paths to failure. But to understand how Illinois’ pension system became the worst in the nation, it’s instructive to look at what happened 10 years ago in the final, hectic days of the annual state legislative session in Springfield.”

I can’t agree with the first sentence. As far as I’m concerned, the disaster younger generations are facing in this country (and not just with regard to public employee pensions) is not regarded as a failure. It is a triumph by Generation Greed. It is a success for those escaping to the grave or (in their case) Arizona rather than Florida, and leaving their costs behind for less well off people to pay. Not only did they demand more and more for less and less, they also demanded rationalization.

In New York, the silence is a big part of that rationalization.