As a designated trustee representing Gregory Floyd on the board of the New York City Employees' Retirement System, the largest municipal public employee retirement system in the United States, I was astounded by comments made by Byron Wien, senior managing director of The Blackstone Group, about retirement benefits for public employees, as reported in Pensions & Investments in a Feb. 8 letter to the editor, “Blackstone bites hand that 'fees it.'”.
According to the letter, Mr. Wien remarked in the webcast “The Surprises of 2010” that ”retirement benefits for state workers — really not only in New York, California and New Jersey but throughout the country — are very generous, too generous. We literally can't afford the benefits we've given our retirees in state and local government so we've got to change that.”
NYCERS, which provides retirement security for 300,000 city workers and retirees, has $544 million in assets under management with Blackstone and has paid the firm more than $16.4 million in fees. Our members and retirees have often accepted lower wages, with the understanding that one day they will be able to retire with dignity. Is an annual pension of less than $22,000 — the average pension for retired New York City employees last year who were NYCERS retirees — “too generous”?
I asked Blackstone to clarify its position about pension plans for public employees — including the defined benefits promised to New York City employees. Hamilton James, Blackstone's president and chief operating officer, responded and, at my request, put the firm's position into writing.
I am pleased to see from Mr. James' letter, dated May 25, to Bud Larson, chairman of NYCERS' board of trustees, that Blackstone “believes that retirement security is critical for all workers” and that “working men and women who put in years of service should have the means needed to live comfortably for the balance of their days after retirement, without feeling their financial security is at risk.”
The trustees of NYCERS are committed to maximizing returns for participants and to ensuring that our members' retirement assets are not being used to finance efforts to undermine their own retirement security. To meet these commitments, NYCERS has and will continue to closely monitor our investment managers.
New York City Employees' Retirement System