Teacher pension fund commissions study of Cuomo plan
The New York State Teachers’ Retirement System (NYSTRS) has retained Cheiron, an actuarial and financial consultancy with a national practice, to analyze Governor Cuomo’s proposal to give school districts a “flat rate” option for pension contributions.
The NYSTRS communications office provided this description of the scope of the study, which is due March 8:
With respect to the scope of services, Cheiron will provide NYSTRS its independent study, including a statement of actuarial opinion, analyzing the flat rate proposal in order to address the following two issues as they relate to NYSTRS:
1. Is the flat-rate proposal actuarially sound?
2. Provide analysis of various scenarios provided by NYSTRS.
Further, Cheiron’s study must include projections of System assets and liabilities for many years in the future and include stochastic modeling in which the results of thousands of different future scenarios are analyzed.
The results should be interesting. **UPDATE: NYSTRS says Cheiron’s proposed estimated fee is $40,231.**
The Division of the Budget worked up Cuomo’s proposal with the help of the Milliman, another nationwide consulting firm. Milliman renewed a five-year, $500,000 actuarial consulting services contract with DOB last fall, according to the state comptroller’s Open Book NY website. DOB has not released any consultant’s reports or analyses used to develop the governor’s pension proposal.
It has been very clear from both the Governor’s recent pension \flat rate\ leveling proposal and the current NYSTRS involvement of an actuary that neither side is willing to take logical,transparent and immediate actions to deal with New York State’s economy-killing public employee pension and healthcare funding.
The Governor’s proposal, once again, permits both he and the legislature to steer clear of the political implications of taking a hard stand to repeal the TriBoro Amendment and to substantially amend the tax-increasing, fiscally disastrous, but politically self-serving and fiscally irresponsible legislation that was passed for decades solely out of fear of election reprisal by TRS, UUP, CSEA and other public employee unions.
Of course, the NYSTRS action for actuarial confirmation of the fiscal soundness of the Governor’s pension \flat rate\ leveling appears to be nothing more than NYSTRS’s initiative to negate any possible legislative actions that would threaten the status quo of today’s unsustainable, union-driven, public employee pension and healthcare funding process. As long as the public employee unions are so well organized and feared by our NY State legislators, only \band-aid\ pension and health care funding and benefit reforms will be the result. Passage of the Tier 5 and Tier 6 Pension \reforms\ are perfect examples of previous \smoke and mirrors\ legislation touted by the Governors and legislators to address overly-generous, un-sustainable public employee pension and healthcare costs. And of course, with little, if any, measureable near-term reductions in pension and healtcare costs and NO impact on current retiree and employee benefits and contributions, the public employee Unions still cleverly touted the Tier 5 snd 6 passage as so-called Union \concessions\.
Until a governor or legislator has backbone to propose real reforms to public employee AND retiree pension and healthcare benefits and costs to participants at levels on par with costs/benefits to private sector employees AND retirees, the Governor, Legislature and NY public employee unions will continue to side-step any meaningful actions to address our economy-killing, overly-generous public pension and health care costs.
C. Michael Mercincavage
Comment by C. Michael Mercincavage — February 15, 2013 @ 1:33 pm