new york | Pension360

Survey: New York Top Real Estate Market for Institutional Investors

For institutional investors, New York is the most desirable real estate market in the United States, according to a survey conducted by the Pension Real Estate Association (PREA).

Other sought-after markets: Chicago, Boston, Los Angeles and San Francisco.

New York Senator Explains Why He Chooses to “Double-Dip”

Pension360 yesterday covered the quirk in New York law that allows lawmakers to file for retirement, collect a pension, but stay in office and continue collecting their normal salary, as well.

Nine lawmakers filed for “retirement” this year. But on Tuesday, one of those lawmakers explained what his motivations were for taking advantage of the legal loophole.

New York State Sen. John DeFrancisco explains his motivations:

“A state statute that was enacted long before I was first elected to the Senate allows state employees who are 65 or older to retire and also earn an income in a state position. This applies to all state employees.

In the past, many state employees, including legislators, have retired and continued to work in state government. I was eligible to do so three years ago, but chose not to. This year, I decided to file for retirement.

If I did not file and died while in office, my wife of 46 years would not receive my valuable retirement that I have earned over the last 37 years. Instead, she would receive a modest lump sum benefit. The older I have gotten, the more I have come to understand that I cannot risk depriving my spouse of what she is entitled to, and what I have earned.

Granted, I could simply retire and not serve any longer. However, now that Republicans have regained control of the State Senate, Central New York would be better served by my returning to my Senate seat, as a majority member and Chairman of the Senate Finance Committee.

So in balancing these factors, I decided to file my retirement papers, effective January 1, 2015, and to continue to serve in the State Senate.”

Chart: Chicago’s Pension Debt, Visualized

Among the country’s largest cities, Chicago’s pension debt is unmatched — in a bad way. Check out the chart above to see just how much pension debt Chicago is shouldering compared to other large cities.

Here’s how Chicago’s unfunded liabilities broke down by system as of 2012, according to the city’s website:

– Municipal Employees’ Annuity & Benefit Fund of Chicago (MEABF): $8.2 billion
– Laborers’ & Retirement Board Employees’ Annuity & Benefit Fund (LABF): $0.9 billion
– Policemen’s Annuity & Benefit Fund (PABF): $7.0 billion
– Firemen’s Annuity & Benefit Fund (FABF): $3.1 billion
– Chicago Teachers Pension Fund (CTPF): $7.1 billion
– Park Employees Annuity and Benefit Fund (PEABF): $0.4 billion

Local New York Lawmaker Calls For Review of “Double-Dipping” Policy

A local New York lawmaker is calling for changes in the way Westchester County handles so-called “double-dipping”, the term commonly used to describe a worker who draws both a salary and a public pension concurrently.

Reported by Politics on the Hudson:

In the wake of the arrest of an aide to Westchester County Executive Rob Astorino on a DWI charge, Democratic Legislator Ken Jenkins is renewing his call for legislation to require to Board of Legislators to approve pension waiver requests.

Hugh Fox Jr., the aide, who is also the chairman of the Westchester Conservative Party, had secured two two-year waivers from the state to allow him to collect both his pension from years as a Yonkers firefighter and his county salary. The county was seeking a third waiver for him when Fox was arrested Monday night after a five-car chain-reaction crash. He resigned his county job the next day.

In a press release, Jenkins said it was time to end “automatic approvals for the County Executive’s political cronies to double dip.”

The lawmaker, Ken Jenkins, says he doesn’t want to deny outright workers’ chance to earn a salary and draw a pension. But he says those waivers should undergo more scrutiny before approval. From Politics on the Hudson:

“There are probably some rare instances when a retiree would make a good hire for the County, and it would make sense financially for the waiver to be granted,” said Jenkins. “But for the sake of good, open and transparent government that keeps the interests of our taxpayers at the forefront of decision making, we must take these automatic, unilateral approvals out of the purview of only the Administration and let the Board of Legislators also deliberate on each waiver, case by case, and make a decision up or down.”

Jenkins had introduced the legislation last January, but is bringing it up again in light of the recent events.

New Jersey Bill Would Make Corrupt Politicians Pay For Court Costs—From Their Pensions

In 2013, New York paid $600,000 in pension benefits to politicians who were occupying jail cells instead of offices.

That’s because New York’s constitution makes it nearly impossible to take away a person’s pension benefits—even if that person is a corrupt politician who was booted from office and sent to jail.

The same is true around the country, as at least six states protect pension benefits under their constitutions. It’s a well-meaning provision, but in the case of corrupt politicians it often has unintended consequences.

New Jersey has been paying attention to New York’s conundrum, and it wants no part of that game.

Three state legislatures (Sen. Christopher J. Connors, Assemblyman Brian E. Rumpf and Assemblywoman DiAnne C. Gove) recently proposed two initiatives that would shield taxpayers from the expenses that come with corrupt politicians—and force those politicians to pay for their court costs, among other things, by garnishing their pensions. From The Sand Paper:

The delegation’s first reform measure would make public officers or employees convicted of crimes affecting their office or found at fault in certain civil actions liable for the cost of prosecution and legal representation if received through the expense of public funds. Under the legislation, convicted persons would be subject to pension garnishment to satisfy the liability.

The second measure would allow a public employer to levy a judgment for restitution of illegally obtained funds against a convicted public employee’s retirement allowance. Provisions of the legislation would apply to any official’s or employee’s pension contribution to principal state-administered retirement systems.

One interesting segment from the lawmakers’ joint statement on the initiatives:

“When holding public office, you are answerable to the people whose tax dollars fund the operations of government,” the statement said. “Therefore, it would be appropriate to garnish the public pension of convicted politicians as a means of recovering the cost of their prosecution and legal defense as well as funds illegally obtained through the use of their government position. To do so would mitigate the cost of corruption on taxpayers, whose interests should be put first as the victims of such crimes.”

School Contributions to NY Teachers Retirement System To Increase Next Year; Marks 58% Bump Since 2012

The New York State Teacher’s Retirement System announced Wednesday that school district contribution rates will increase by 8 percent next year, rising from 16.25 percent to 17.53 percent.

[The official announcement can be seen embedded at the bottom of this post.]

The new contribution rate doesn’t go into effect until the fall of 2015.

Including the latest increase, school district contribution rates have increase 58 percent since 2012—the contribution rate in 2012 was 11.05 percent, according to the Public Fund Survey.

That’s partially because the System is paying out more pension benefits than ever before; NYSTRS will pay out $6.3 billion in pensions in fiscal year 2014-15, according to the System’s spokesman. In 2009-10, that number was $5.3 billion.

The NYSTRS, once fully funded, has been on a steady decline for years.

The funded ratio has since dropped to 89.8%, according to the most recent data available.

Here’s the official announcement from the NYSTRS:

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Some NY State Police Officers Use Private Jobs to Boost Public Pensions

Publicly employed police officers are often contracted to work private events—from keeping the peace at retail stores around Christmas-time, to keeping an eye on the crowds at music festivals.

But an investigation by a New York newspaper found that several police departments in the state are letting the overtime racked up at private events count towards an officer’s public pension—a practice which the state Comptroller’s Office says is not allowed.

From the Times-Union:

The state Comptroller’s Office says overtime reimbursed by a private company does not count toward an officer’s pension benefit.

But the Times Union found that several Capital Region police departments — including those in Colonie, Schenectady and Troy — report private duty overtime to the retirement system.

“I think a lot of people might be surprised to the extent with which this happens around the state,” said E.J. McMahon, president of Empire Center for Public Policy, an Albany think tank. “You can actually bolster your pension with time spent working in uniform on private time.”

Taxpayers should care about the practice, McMahon said, because pensions are lifelong payments backed by taxpayer dollars.

The legality of using private duty details as part of the pension calculation is murky. Several retirees are appealing the comptroller’s position in state Supreme Court.

The retirement of a Guilderland police officer who worked overtime at Crossgates Mall brought the issue to the attention of many Capital Region police chiefs. As a result, Guilderland stopped reporting private work to the retirement system and, last month, Bethlehem prohibited officers from working the jobs.

Albany and Saratoga Springs also comply with the comptroller’s view that private overtime is not pension eligible.

But several high-ranking police officials have publicly raised concerns about whether its fair to disallow private jobs when calculating pension benefits. From the Times-Union:

“Anytime a man or woman is in police uniform, they are on police duty, period,” Colonie Police Chief Steven Heider said.

Heider considers the officers on-duty, accountable to the police department and exposed to the dangers of police work.

Last year, Colonie police collected about $120,000 in reimbursements from private entities for police details, which Heider said are assigned by rotation. About 40 percent came from patrols at Colonie Center mall.

The town reported the wages to the retirement system as pension eligible.

Colonie requested guidance from the comptroller about whether to report the wages as pension eligible, but never heard back, Heider said. If the comptroller advises Colonie to stop, the town will, he said.

Of the seven police departments in upstate New York’s Capital Region, three departments allow private duty overtime to count toward public pensions. Officers in those departments have racked up nearly $200,000 in private duty overtime last year, according to the Times-Union investigation.

Photo by Giacomo Barbaro via Flickr CC License