NYCERS Overspends

To the Editor:

The City of New York is now trying to close a budget deficit. As part of its plan, it is proposing to cut the police and education budgets to close this gap.

I am recommending that the city should closely examine the growing cost of investing the assets of the five city retirement systems. In Fiscal Year 2007 that amount was close to $300 million.

In particular, the New York City Employees' Retirement System, one of the five systems, reported spending approximately $98 million on investment expenses for FY-2007. NYCERS does not closely monitor these payments, so this amount may not be totally accurate.

NYCERS originally budgeted $75 million for investment expense in FY-2007. It is not clear why the actual expenses were significantly higher. NYCERS requires the public to make a FOIL request to obtain information about its financial records.

As recently as FY-2003, NYCERS investment expenses were $28.4 million a year.

For FY-2008, NYCERS, adopted a budget of $107.3M for investment expenses. All together, the five systems will spend over $400 million in FY-2008. It is possible that up to $300 million of this is being spent with no benefit.

JOHN J. MURPHY

Editor's note: Mr. Murphy is a former Executive Director of NYCERS.