Market Crashes on NYCERS
To the Editor:

The New York City Employees Retirement System is in a very serious financial situation. As of June 12, NYCERS had lost $3.3 billion in 2008.

As of yet, NYCERS has not publicly reported its June 30, 2008 closing balance. June was such a terrible month for stocks that final loss for fiscal year 2008 will be at least $4 billion. That is a 9.5-percent loss for 2008. The outlook for 2009 is even worse.

NYCERS has never recovered from the $12 billion that the system lost in the period from 2001 to 2003. Now the system is again caught in another collapsing market.

To rub salt in the wound, NYCERS paid $120 million in fees to its investment managers in 2008. That is like paying your doctor a bonus for helping you kill yourself. What do you think the bonus will be in 2009?

Not everyone lost money last year. The Harvard Endowment Fund had a profit of $2 billion and also gave the university $1.6 billion for its operating budget in 2008.

In addition to these huge billion-dollar investment losses, the city will have to pay NYCERS more than $2 billion in pension expenses in 2009. This is 20 percent of the annual payroll of the members of NYCERS.

By the end of 2009, almost all of the elected officials on the Board of Trustees will be gone. They will not have to deal with the long term impact of their investment decisions. That will fall to whoever is elected in November 2009 and the members and retirees of NYCERS.

JOHN MURPHY Editor's note: Mr. Murphy is the former Executive Director of NYCERS.