Ex-DOT Big: Delay In Deferred Comp Transfer Cost Me

A former senior city official has blamed the Office of Labor Relations for a provision in the deferred compensation system that cost him $20,000 when he tried to pull his money out of the stock market before its meltdown started.

MARC KADUSHIN

Marc Kadushin, a 14-year veteran of city agencies who was an Assistant Transportation Commissioner, shifted his deferred compensation funds into an annuity, but did not realize that in transferring funds there would be a 60-day waiting period unless he checked a box to have the shift effected immediately. The delayed transfer cost him $20,000 as the stock market plummeted during that time.

'Thought I Was Out Safely'

"I thought I was out of the market and into a safe investment, but I wasn't," he said in a phone interview. "I would have thought somebody would have said something. Nobody told me anything and it's not clear."

Deferred Compensation Plan General Counsel Denise Peart issued a statement which said, "As was explained to Mr. Kadushin, the Deferred Compensation Plan's timeline for distribution, which does not exceed 60 days, is necessary for the efficient processing of the mass number of distribution forms received by the plan including the verification of distribution eligibility. The plan's distribution guide, in which the distribution form is attached, states that the participant's account continues to be in his control, is not frozen and is subject to market fluctuations during the 60-day distribution period."

Mr. Kadushin, who said he lost 15 percent of the value of his deferred compensation, claims he has been getting the run-around by city government. He said now he just wants to alert others to this problem so that no one else suffers his fate. "For a lay person, a government worker, it is confusing," he said. "They should make it clearer. Why should I need to read a thousand pages just to get my money out?"

Mr. Kadushin wondered if the waiting period had affected other city workers, but only those who tried to pull their money out of the stock market prior to the big meltdown might have been hurt by the delay. Ms. Peart said she received no other similar complaints.

Mr. Kadushin was also disturbed by what he called lack of oversight of the plan, which unlike pensions is not regulated by the City Comptroller's Office.