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Push to Merge City's
Smallest Pension Fund;
Some DC 37 officials want amendments to the bill to ensure no loss of benefits, while others in the affected Local 372 oppose the bill outright because the local would lose its seat on the pension system's board. Annuity Loss? One concrete change that could affect DC 37 members in BERS is the potential loss of the tax-deferred annuity option. Only TRS and BERS currently allow employees to invest pre-tax money in funds that grow based on stock or bond market rates. NYCERS does not offer that option. Instead, Tier I and II pensioners are guaranteed a 8.25 percent return and Tiers III and IV members are guaranteed 5 percent. The average annual return from the New York Stock Exchange over the past 75 years has been about 10 percent. That number varies, however, depending on which years the money was invested.
"We introduced it at the request of the Mayor," said Barbara O'Neill, the legislative director for Brooklyn Assemblyman Peter Abbate. "It doesn't seem like a horrible thing to do, but I think it will need substantial amendments to pass." She added that with about five weeks left in the legislative session, she believed there was ample time for the bill to go through, but that no specific amendments had been proposed yet. '372' Would Lose Clout DC 37 officials declined to comment on the legislation, citing ongoing negotiations. But sources familiar with the situation, who asked to remain anonymous, said that the main issue for DC 37 was that Local 372 President Veronica Montgomery-Costa would lose her influence over how the money is invested and doled out if the BERS board is dissolved. Local 372 currently has one of the two "employee" seats on the 15-member board. In order to act, a majority of board members must approve a measure, and that majority must include one of the employee members. The board makes most decisions about the fund's usage, including whether a member is eligible for a disability pension and how the money is invested. Local 372 members from BERS would be switched into NYCERS, where the three employee seats are occupied by DC 37, Teamsters Local 237 and Transport Workers Union Local 100. The 27,000-member Local 372 would not hold the same sway in a fund that covers almost all of DC 37's 121,000 members and its retirees, not to mention the tens of thousands of members from the other two unions. 'From Big Fish to Minnow' "Right now, Local 372 is dominant in BERS," said one labor insider. "If all BERS gets shipped into NYCERS, they go from being a big fish in a small pond to being a minnow." This issue is of no concern to the UFT, since its members would be transferred into TRS, where the UFT already holds the three union-appointed seats. The Bloomberg administration supports the shift because officials claim it would save the city $12 million annually in overhead and administrative costs. "BERS has become redundant," said Jason Post, a spokesman for the Mayor's Office. "This change creates economies of scale without the loss of a single job. It's doing more with less." City officials have assured lawmakers that all 70 BERS employees would be given comparable positions in NYCERS and TRS. The savings would come from office space and technology. The UFT had previously backed legislation in Albany to move its members out of BERS and into TRS, but the measures were vetoed. The current bill transfers some UFT positions into NYCERS, but officials said they were working with the city to change that. If the bill is altered to transfer all UFT titles into TRS, UFT officials said they would give the bill their full support. Teamsters Local 237 President Gregory Floyd said his union was still studying the legislation, which would only affect a few hundred of his members.
"We introduced the issue to see if it had support," said
Ms. O'Neill. "We're going very slowly on this, but there's still enough time to
figure this out." | ||||||
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