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New York Post

 

Funny Finance and the Pension Puzzle

November 21, 2011

By Nicole Gelinas

PRINTER FRIENDLY

Future city pensioners might wonder whether Comptroller John Liu, a guy who isn’t being up-front about his own funds, is being truthful about the disposition of their retirement benefits.

You’d think that the person responsible for New York’s finances would be meticulous about the money he oversees for his own benefit. Not so.

Last week, the feds charged a Liu campaign fund-raiser, Xing Wu Pan, with fraud. An undercover agent tricked Pan into thinking he was a businessman offering $16,000 for Liu’s re-election. To get around the city’s contribution limit, Pan said he could split the money into smaller “donations” from fake contributors. Pan told the donor that Liu would know where the cash came from.

Friday, Liu said the charges were “quite embarrassing, as the chief financial officer of the city.” But he still won’t release the names of his top fund-raisers, as the law demands, saying it’s not so easy.

How hard can it be? It looks as if Liu is just buying weeks, or months, to avoid harsher scrutiny.

Yet a true picture of the comptroller’s finances will inevitably emerge. Delaying gains him nothing.

Political shenanigans are a dime a dozen here, but city workers should pay attention in this case. Liu has built his reputation on one issue: public-pension benefits. His position, laid out in three reports over eight months, is that they’re fine the way they are.

Last month, Liu’s latest report concluded that New York taxpayers are getting a great deal on pensions, even as:

* Uniformed workers continue to retire after 20 years with oodles of overtime baked into their benefits.

* Other workers retire in their 50s with guaranteed benefits for life.

* Annual pension costs have more than octupled under Mayor Bloomberg, from $1 billion a decade ago to $8.4 billion.

In one year, New Yorkers spend four times on pensions what they’ve spent over five years to build the mayor’s signature infrastructure project, the No. 7 subway extension to Manhattan’s far West Side.

Future retirees are risking that Liu is playing just as fast and loose with their old-age security as he is with the campaign-finance rules. And it’s all about him: Just like he needs campaign money, he also needs union votes.

Unlike with the campaign-finance case, Liu likely will be long gone before a reckoning of pension costs can take place.

Liu’s not the only recent regional pol whose stance toward the public fisc has proved disastrous.

In New Jersey, back in 2006, the state’s new governor, Jon Corzine, said that much of that state’s pension problem could be solved if pension-fund managers would just take more risk. One union leader, Rae Roeder, fretted that “just like you’re sitting at the craps table, you can lose it all. And it’s not his money — it’s our members’.”

Yes. This year, former Gov. Corzine used the same strategy at the small brokerage firm he went on to manage, MF Global. He bet it all — and the company’s shareholders and employees lost everything three weeks ago. Investigators are probing whether Corzine’s firm used “segregated customer funds” to bet more than the legal limit. That is, they’re looking into whether Corzine’s firm stole customer money.

In the Corzine case, just as in Liu’s campaign-finance kerfuffle, the facts will come out — fast. But it will take years for Jersey public workers and retirees to understand the extent of their potential problems.

Many observers say that public workers shouldn’t care: Public pensions are guaranteed, so it’s the taxpayers’ problem.

But, absent serious reform, elected officials are going to have to choose among paying pensions, paying bondholders and keeping cops on the street. That’s happening in such poorer cities as Central Falls, RI, where current pensioners face big benefit cuts.

People say it can’t happen here because New York is rich. But it’s thinking like that that could make New York poor. The thinking that mortgages were safe, for instance, made them risky.

Future retirees had better look out for themselves. The pols — and today’s union leaders — figure they’ll be long gone before the bill comes due.

Original Source: http://www.nypost.com/p/news/opinion/opedcolumnists/funny_finance_and_the_pension_puzzle_JpNURDoEduKCFq6q8oOqaN#ixzz1eLaipV7L

 

 
 
 

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