Wall Street Fees Wipe Out $2.5 Billion in New York City Pension Gains - NY Times

The Lenape tribe got a better deal on the sale of Manhattan island than New York City’s pension funds have been getting from Wall Street, according to a new analysis by the city comptroller’s office....  http://nyti.ms/1anMi33

Apparently, most of the interest gain on our pension money is going straight to Wall Street.  Disgusting - and frankly, I don't think Mulgrew's comments below communicate the appropriate level of outrage. If I was charged $250 in fees on a $16,000 I had in a bank account, I would be calling up the FDIC and saying that I had been scammed.  If we get charge $2.5B on $160B in our life savings, then we should be demonstrating in the streets.... 
.... comment on MORE Listserve

I should apply for the job of pension fund manager. Frankly, I've done much better than they did over the past 25 years. Or maybe I should run for the UFT pension rep position.

The analysis concluded that, over the past 10 years, the five pension funds have paid more than $2 billion in fees to money managers and have received virtually nothing in return, Comptroller Scott M. Stringer said in an interview on Wednesday.

“When you do the math on what we pay Wall Street to actively manage our funds, it’s shocking to realize that fees have not only wiped out any benefit to the funds, but have in fact cost taxpayers billions of dollars in lost returns,” Mr. Stringer said.

Why the trustees of the funds — Mr. Stringer included — would not have performed those calculations in the past is not clear.

Mulgrew's la-di-da comments are priceless:

Michael Mulgrew, the president of the United Federation of Teachers, said he was happy that his union’s pension fund, the Teachers’ Retirement System of the City of New York, had been performing well. But he said the fees paid to some managers were “ridiculous” and should be renegotiated if those managers are retained.

“Education’s always being put under reform; maybe some of these financial practices should be put under reform as well,” Mr. Mulgrew said. He praised Mr. Stringer for taking aim at a line of business that has been very lucrative for Wall Street.

Where are our elected pension reps?

Q&A on NYC Pensions

I remember hearing some bad stuff about how pensions and salaries were treated in NYC in the 30's. And we haev the example of the mid 70s' when salaries were frozen, schools closed, preps cut and there were 15,000 layoffs. Remember the current UFT contract assures no layoffs - unless there is a financial crisis. That is the source of the ATR situation. And if there are layoffs, will they find a way to get rid of ATR's or will the newer teachers be cut?

Anita asked a question on ICE-mail to Queens high school chapter leader Michael Fiorillo (see his suggested financial commentary web sites in the sidebar). (People could use some answers from the UFT.

The questions I have and I'm hearing from colleagues: is a TDA account insured? What about our pensions?? (Feel squeamish that we just don't know such basic facts.......)

Michael responds:

Hello Anita and Everybody,

To answer your questions as best I can, and please DO NOT base any personal decisions on what I'm about to say since I can be wrong, my understanding is that:

- If by "insured" you mean guaranteed by the federal government a la the FDIC, then Variable A is most certainly NOT insured.

- I am not familiar at all with Variable B, and cannot comment. It is said to be invested in the most secure and stable financial financial instruments, but what does that even mean in this climate?

- Frankly, with the caveat that I could be wrong, I have fears about the fixed fund, as well: it is certainly not insured by the FDIC, and if there is any kind of insurance it is through private entities (such as AIG , AMBAC and others). Not a comforting thought. I've been following this issue very closely for years now, and have worried about the safety of the fixed fund in a financial crisis. After all, at a time when banks were paying 2-3% on CD's, how was the fund able to provide an 8.25% return? My fear is that they could possibly have these toxic intstruments, which paid higher interest.

- As for the pension fund, the New York State constitution protects the pensions of all vested members. However, and realistically, how much comfort is that, when the Federal Reserve Bank itself is overextended? Unfortunately, the predators and parasites at the investment banks - the same people "investing" in charter schools, Teach for America and corporate school reform in general - have for years seen the pension funds as rubes to be fleeced.

What we are seeing is the direct result of thirty + years of income polarization based on the cannibalizing and outsourcing of the nation's real productive capacity; unfortunatley, because of the infinite greed of these sons of bitches, we will all reap the whirlwind.

I hope this "helps."

Best,
Michael Fiorillo (aka "Mr. Sunshine")

Pensions, Merit Pay, Class Size and Collaboration....

...UFT Actions Speak Louder Than Words

Updated 10/26 pm

James Eterno has written a piece today for the ICE blog on the winners and losers in the pension and merit pay plan, apples and oranges that have been merged by the UFT leaders (call it an appor.) One of the little tidbits James points to is that the original agreement in the horrendous 2005 contract where little bombs were set on pensions and merit pay that meant teachers voted for the future 2007 agreement when that passed the 2005 contract:

With regard to the long term recommendations the 2005 Fact Finders made subject to adequate CFE funding, the parties shall establish a Labor Management Committee to discuss the following issues: a)bonuses, including housing bonuses, for shortage license areas; b) a pilot project for school-wide based performance bonuses for sustained growth in student achievement c) salary differentials at the MA-5 through MA-7 levels; and d) a program for the reduction of class sizes in all grades and divisions. If the parties agree on the terms of any or all of these issues, they may be implemented by the Board using whatever funds may be identified.

Note provision d on class size reduction the one item ignored. Are you surprised? We have claimed all along on issues such as high stakes tests and class size, watch what the UFT does, not what it says. The merit pay plan endorses high stakes testing and the entire agreement shows where the UFT really stands on class size. Actions certainly do speak louder than words.

TJC's Peter Lamphere and Megan Behrent have written a piece on the merit pay issue which I posted at Norm's Notes here.

Eduwonkette is running a series this week on performance pay from her usual research-based perspective. And 8 year Teach For America's (see, some do stay) Ms Frizzle seems willing to try it based on the fact there's trust in her school. Schools where there's none should probably skip jumping in. Of course, there's no accounting for the high percentage of lunatic, power-hungry principals. In my continuing saga - "The Play's The Thing" posted a few days ago, all incidents are exaggerations based on the reality of my school. And that principal would be one of the better ones today.

On Collaboration
The NY Teacher is covered with the word "collaborate." Now, we haev used that word to brand UFT Leaders as co-conspirators with BloomKlein, Eli Broad, etc in their attacks on public education adn unions. So it nice for them to affirm what we have been saying all along, branding them as today's version of Vichy. And the fact that Vichyssoise will be added to the menu at Executive Board meetings affirms this point.

People have been telling us they are a bit tired of the constant use of the word. So we have decided to assist our buddies at the NY Teacher in an effort to make the paper more interesting.

Synonyms for collaborate:

act as a team coact cofunction collude come together concert concur conspire

cooperate coproduce fraternize get together go partners hook on hook up interface join forces join together participate pool resources team up tie in

work in partnership work together work with

Add one more: sellout