When the UFT was negotiating with the City for a contract, the City kept claiming poverty and the UFT accepted their argument by allowing for a cheap "City pattern" to be established by giving a 10% raise for a seven year period or 1.43% annually, much less than the inflation rate. Before the UFT agreed to the contract a very respected economist, Mel Levy, stated in the Civil Service paper,The Chief, that for every 1% point the NYC pension funds exceeded the average7% rate of return, the pension funds kicks back 2 billion dollars to the City's general fund. However, both the UFT and City ignored this extra money as they negotiated a contract.
Now according to the New York City Controllers Office, the NYC pension funds made 17.4% for the last fiscal year. Much of that difference went into the City's general fund and was quite a windfall. The UFT leadership will make the case that they didn't realize the NYC pension fund did so well. However, when the stock market went up 22% for the same period, what did they think the NYC pension fund's rate of return would be since its heavily invested in stocks? Moreover, in the last 5 years, the average rate of return was 13.4% which allowed the City to get a windfall of many of billions of dollars if one uses Mel Levy's projections. Yet the union accepted the City's claim that they were broke, despite the economic uptick in the City's finances. It certainly seems like the City came out ahead of the game when it came to the UFT contract.
Its one thing for the City to claim they're broke but its something else for the union leadership to swallow the bull, hook line, and sinker, and give its members an inferior contract..
7 comments:
Maybe they can send the money to Christie to prop up the pension in Jersey.
Or how bout giving us better medical coverage than what we have instead of promising to increase co pays, and mandating use of specific facilities for blood tests, mri's,
x rays and other assorted lab work, if the savings goal is not met.
It all sucks for the working people of the US. Are we waking up yet?
Some of that money goes to the city but shouldn't the rest be used to fully fund reserves so that when the next recession hits, we are covered? We are certainly not Detroit or New Jersey.
The excess for the police, fire and sanitation is used to fund their Variable Supplement Fund. I think each retiree will get $11,000 annually from the fund.
Do not "mis-underestimate" the combination of corruption and incompetence of Mulgrew and company. However, in the end we vote them in and vote for the inferior contracts so we have only ourselves to blame.
Chaz, thanks for he post. We were fleeced by the union. I hope the comment from the previous article is accurate that Mulgrew was served. The city is able to pay more money upfront. Keep up the good work.
To 7:40,
I had a friend years ago that spent $10,000 on suing the UFT. The courts threw it out saying members can't sue their own union in NYS. ( However, a vote with 25% of the UFT voting to disenfranchise the union-Unity, will work!)
Sucks for us but it is water under the bridge till then next round of contract negotiations goes through. Oh yeah, I call BS that the UFT had no idea how well the pension fund was doing.
Of course they knew. We bailed the city out like we always do.
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